By Jeffrey Moyo
HARARE, Dec 14 (Thomson Reuters Foundation) - Bank clients wait in a meandering queue at Barclays along First Street in Harare, Zimbabwe's capital - but those wanting to withdraw cash may be on a hopeless mission as often there is no money available.
Out in the crowded suburb of Mabvuku, Lynet Sigauke, 41, does not have a bank account, and says she has not felt the effects of cash shortages in the southern African nation.
She is a pioneer member of the Shingairai Savings Club formed by a group of local people who circulate hard currency among themselves to avoid the country's liquidity crunch.
"As soon as we sensed that money was going to become a problem, we built our stocks as a savings club through individual contributions," Sigauke told the Thomson Reuters Foundation.
Anyone borrowing money from the club, including individuals recommended by members, must pay it back in hard cash at an interest rate of 15 percent.
Sigauke, who is treasurer of the 30-strong Shingairai club, said members take turns to make contributions of $300 each into its coffers, to ensure adequate levels of cash.
Savings clubs are not a new phenomenon in Zimbabwe.
The first is thought to have been started in 1963 by a Catholic missionary, Brother F. Waddelove, launching what became known as Zimbabwe's savings movement.
In recent years, with the economy in the doldrums and inflation high, the savings societies resurfaced - this time giving citizens precious access to scarce hard currency.
WAY OUT OF POVERTY
Even economists agree indigenous savings clubs are the way to go as Zimbabweans try to avert the deepening cash deficit.
"Without cash at the country's banks, you should expect Zimbabweans to do everything to survive the crisis - and that is why savings clubs have become a big hit," said Kingston Nyakurukwa, an independent economist based in Matabeleland North Province.
Thanks to the clubs, many like Sigauke say their lives have changed for the better.
"Before, I was extremely poor - in fact a charity case - but after I became a member of Shingairai Savings Club, I now have a home under construction here in Harare," said Sigauke, who also owns a thriving transport business ferrying children to and from private schools by mini-bus.
Like other club members, she was able to borrow money to invest in her own projects to generate income.
There are no official statistics about the number of savings societies that have sprung up in Zimbabwe, as scores of them are operating illegally.
But the Reserve Bank of Zimbabwe said this year $7 billion is circulating in the informal sector, which savings clubs are drawing on.
With the cash crisis intensifying, Zimbabwe's backyard savings societies have avoided banks because they have lost trust in them, relying instead on strong social and peer-review networks.
"Most of the cash is now in the informal sector ... which points to issues of lack of confidence in the banking system," said Prosper Chitambara, an economist and policy advisor with the Labour and Economic Development Research Institute of Zimbabwe. "People don't trust policy makers, but themselves."
Government officials accuse them of making matters worse for the formal financial system.
"To us they mean nothing - why would we have them as long as they are not contributing to easing cash shortages at banks by banking their proceeds?" said a top official at the Reserve Bank of Zimbabwe, speaking anonymously as she was not authorised to speak to the media.
NEW LEADER TO THE RESCUE?
Last month's resignation of former Zimbabwe President Robert Mugabe, who had been at the country's helm for 37 years, has triggered optimism among citizens struggling with cash shortages.
Mugabe's former deputy, Emmerson Mnangagwa, who took over the presidency, pledged in his acceptance speech to end the cash crunch.
"The liquidity challenges which have bedevilled the economy must be tackled head on and must be dealt with as a matter of urgency," he said at his inauguration ceremony.
After the change in leadership, British Foreign Secretary Boris Johnson said London could take steps to stabilise Zimbabwe's currency system and extend a loan to help clear its World Bank and African Development Bank arrears.
But nearly three weeks after Mnangagwa was sworn into office, the bank queues had yet to shrivel.
Still, some Zimbabweans remain optimistic the cash situation will improve.
"I am sure sooner or later the cash crisis will be over because here is a new leader who has vowed not to follow in the footpath of his destructive predecessor, Mugabe, who hated everything linked with the Western countries," said Tagwirei Zirevu, a businessman based in Harare.
"(Mnangagwa) has pledged to work with every nation in the world to revive Zimbabwe's economy," he added.
But savings club member Sigauke urged caution. "We may have to endure a little longer before Mnangagwa manages to arrest the country's cash woes," she said.
(Reporting by Jeffrey Moyo; editing by Megan Rowling. Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers humanitarian news, climate change, resilience, women's rights, trafficking and property rights. Visit http://news.trust.org/)
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