Saving in groups in Tanzania. United Minds consultants Sandra Holmqvist and Andreas Befrits report from Dar es-Salaam.
Saving together is common in Tanzania. Like having a gym partner to motivate exercise, both women and men in Tanzania claim to be less prone to spend their savings and more likely to meet their goals if they save as part of a group. There are many ways in which this is done: either through so-called VICOBAs - village community banks - which are micro finance institutions where both saving and loaning is done within the same group. These groups often consist of around 25 persons, who buy in through shares which they are given back at the end of the year, along with the interest profits gained from lending within the group throughout the year. Another popular way of savings is known as Merry-go-round, where a group of friends at work or in the community form a group and save a certain amount every month, which at regular intervals is given to one of the members. Merry-go-round is commonly referred to as game-playing, even though no risk is involved, nor a possibility to receive more or less than any other member of the group. But, in a country with massive inflation (between 7 and 12 % in consumer prices in the last two years), and with bank accounts being both costly and seldom providing interest, group savings might just be the type of “game” needed to achieve financial goals.
