Retired Major Silibaziso Zhou
The Women and Youth Affairs Ministry has publicly endorsed the formation of Savings and Credit Cooperatives (SACCOS) for women and youths involved in business.
The ministry reportedly has more than 110 000 registered savings and over a million unregistered savings.
These savings hold special potential for businesses to leverage and this article will explore how SACCOs can transform the business environment and contribute to elevating the nation to an upper-middle-class status by 2030.
SACCO stands for Savings and Credit Cooperative Organisation. These are member-owned financial cooperative institution that provide financial services to its members, often with a focus on promoting savings and providing access to credit facilities.
SACCOs are designed to be community-based organisations, serving the financial needs of their members while fostering a culture of saving and financial inclusion. SACCO takes different forms.
Here are some of the different types of SACCOs:
Employee SACCOs: These are SACCOs formed by employees of a particular organisation or company. They are often established to provide financial services and support to the employees of that specific organisation.
Community SACCOs: These SACCOs serve the financial needs of members within a specific geographical community, such as a village, town or district. They are focused on promoting financial inclusion and economic empowerment within the local community.
Multi-Purpose SACCOs (Mukando): These SACCOs offer a wide range of financial services, including savings, grocery, credit, insurance and other financial products. They cater to a diverse membership base and aim to meet various financial needs within the community.
Agricultural SACCOs: These SACCOs are specific to the agricultural sector and are designed to provide financial services tailored to the needs of farmers and agricultural businesses. They may offer unique products such as crop and livestock insurance, agricultural input loans and other services relevant to the agricultural industry.
Youth SACCOs: These SACCOs target young people and are focused on promoting financial literacy, entrepreneurship and economic empowerment among the youth population. They may provide specific programmes and services tailored to the needs of young members.
Women SACCOS: These SACCOs target women and are focused on promoting financial literacy, entrepreneurship, and economic development, poverty eradication, empowerment, poverty among the women population. They may provide specific programmes and services tailored to the needs of women.
The above are just a few examples of the types of SACCOs that exist. There may be variations and combinations of these types based on the specific needs and regulations of different regions or countries.
Each type of SACCO is designed to address the unique financial needs of its members and contribute to the overall goal of promoting financial inclusion and economic development.
A number of these SACCOS in Zimbabwe are found in the informal sector and they are formed by women.
Women in Zimbabwe are known to be organised and to practice the Mukando. The mukandos are known by various names such as Fushai, Grocery club, housing clubs and mota clubs. They are named according to their purpose.
There are many advantages associated with these SACCOs. First and foremost, SACCOs provide access to affordable credit, a crucial lifeline for budding entrepreneurs and small businesses. Access to credit is often a significant challenge for many Zimbabwean businesses, especially those in rural and under served areas.
SACCOs, with their emphasis on community-based financial services, play a pivotal role in providing access to credit facilities that may not be available through traditional banking channels.
This, in turn, empowers entrepreneurs to invest in their businesses, expand their operations and ultimately contribute to economic growth.
Furthermore, SACCOs promote a culture of saving and financial literacy, which is fundamental for the long-term success of businesses and individuals alike.
By encouraging regular saving habits and providing financial education, SACCOs equip their members with the knowledge and resources necessary to make sound financial decisions and plan for the future.
This not only benefits individual members but also contributes to the overall stability and growth of the economy.
In addition to financial services, SACCOs often provide a platform for collective action and cooperation among their members.
Through the pooling of resources and shared risk, SACCO members can support one another in pursuing common economic goals.
This cooperative spirit fosters a sense of community and solidarity, which can be a powerful force for driving economic development at the grassroots level.
Moreover, SACCOs have proven to be crucial in promoting financial inclusion, particularly among segments of the population that are often excluded from formal financial services.
By bringing financial services closer to the people, especially in rural and marginalised areas, SACCOs play a pivotal role in ensuring that no one is left behind in the country’s economic development efforts.
SACCOs offer a range of financial services, including savings facilities, low-interest loans and other financial products.
Members of a SACCO benefit from the cooperative’s services as well as becoming part-owners of the organisation. The cooperative nature of SACCOs fosters a sense of community and mutual support among members.
One of the key advantages of SACCOs is their focus on financial inclusion and providing access to financial services for individuals and businesses that may have difficulty obtaining them from traditional banks.
Additionally, SACCOs often have more flexible lending criteria and offer personalised support to their members, making them an attractive source of financial assistance for SMEs and individuals who may not meet the requirements of traditional financial institutions.
Overall, SACCOs play a crucial role in promoting financial inclusivity, empowering communities, and providing access to essential financial services for their members, including small and medium-sized enterprises.
As Zimbabwe continues its journey towards economic transformation and prosperity, it is essential to recognise and harness the potential of SACCOs in driving inclusive and sustainable growth.
By supporting and strengthening SACCOs, policymakers, businesses, and communities can unlock new opportunities for empowerment, entrepreneurship, and economic advancement across the nation.
Rtd Major Silibaziso Zhou is a lecturer at Great Zimbabwe University and has the following academic accolades (FACCA, FCGI, MBA, MCOM ACC.B.TECH ACC, Forensic Audit and PAAB)