malvernmugadzikwa
SAVING is entrenched in Zimbabwean culture, as shown in the concept of “mukando”, which basically refers to a savings club.
However, since many of these savings clubs are informal, joining them can be a double-edged sword.
These clubs have their fair share of risks and rewards, and anyone thinking about joining one needs to weigh these carefully.
Benefits
Fast, easy savings: Mukando can be a great way to save money without the usual hassle of banking. You are pooling resources with friends, family members or colleagues, making the process more flexible and less intimidating than traditional savings accounts.
Access to lump sums: One of the biggest advantages of mukando is getting a lump sum of money when it is your turn. This can be very useful for big expenses like school fees, starting a business or even that new flat screen television set you have been eyeing.
It is like getting a mini-loan, but you do not have to pay any interest.
Accountability and discipline: Let us be real, saving on your own can be tough.
There is always that temptation to “borrow” from yourself, right?
But in a mukando, there is positive peer pressure, and you do not want to be that person who fails to contribute.
You learn financial discipline because you are accountable to the group.
Social support: Mukando often goes beyond money: The members create a community.
You build trust, friendships and sometimes even get advice on how to manage finances or grow your business.
It is like therapy, but with money.
Risks
Lack of formal protection: Mukando is informal, meaning there is no legal protection if things go south. If a member suddenly refuses to contribute, there is no legal recourse. You are essentially trusting that everyone will play by the rules.
Default risk: There is always the risk that some members may fail to contribute when it is someone else’s turn to collect. This can disrupt the whole system and leave some people out in the cold.
Group dynamics: A mukando is only as strong as the relationships in it.
If there is any drama or trust issues within the group, the savings club could crumble faster than a poorly baked cake. Choosing your group wisely is key!
No interest: Unlike a bank savings account, where your money can at least earn a bit of interest, a mukando does not come with that perk. You are getting back what you put in, nothing more.
Mukando can be great, but it requires trust and a solid group.
If you are thinking of joining one, make sure you know the people well and set clear rules.
Online Reporter