Started three years ago as a pilot project and officially launched in March this year, the Savings and Credit Cooperative saw members of the trust pooling their resources to lend to each other at low interest rates.
The bank is managed by the community itself through representatives chosen on merit. They all contribute money to the bank and receive 20% interest annually, while those who borrow pay 25%. The bank also lends to other bigger institutions such as churches and schools.
Manicaland Small to Medium Entrepreneurship chairperson, Andrew Ngondonga, said most small business in rural areas have a challenge in accessing loans from banks to boost their business because they do not have collateral.
“The idea of community banking is the only way forward. The interest is very low and you can save in the bank without losing your cash to service charges,” said Ngondonga during the official launch of a community bank.
Trust Mahuta, a local financial consultant, praised the community of Chipinge for coming up with such an initiative.
“This is a brilliant idea that should be emulated by all communities. There is need for accountability and transparency – but the whole idea is noble. Small amounts of money can make a big difference if they are pooled together,”said Mahuta.
So far over 20 cooperative members have started their own businesses while others are now proud owners of stands and other valuable property.
“At first the idea faced resistance because people did not understand it. We managed to convince them through dramas and public shows. Later it penetrated in their brains, today we are proud owners of a community bank,” said Martha Muchanyara, a pioneer member of the bank.
She now owns a shop and a car, which she bought from interest she got from the bank.Other members said the community banking initiative was the only way to push back the frontiers of poverty in marginalised communities such as Chipinge.
Post published in: News