If you’re looking for a way to save that’s unique to Zambia, you have to consider chilimba. What is chilimba? How does it work? And, how can you use one to save? These questions will be answered in this article.
Chilimba is a club consisting of 3 or more people where each member contributes a fixed amount of money on a monthly basis. Its origins date back to when English settlers “used them as a way to trade livestock at cattle auctions”. Nowadays, the term chilimba is used to describe group saving and investment.
Chilimba is essentially a co-operative savings scheme where groups of not less than 3 “create a pool of money.” Members can access the money for a variety of different reasons that the members decide such as funerals, groceries and investments. Default is rare, as the commitment is taken very seriously. New members are added at the end of the rotation.
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It’s easy to set up chilimba or join an existing one. They are easy to manage as all of the big banks offer accounts. Just shop around to see what accounts suits your chilimba best in terms of transactions and interest rates.
Whilst chilimba is a good idea to consider for savings, it’s probably not best for high value investments as it can make you worry about safekeeping. It is not a remedy for reducing poverty but, is appropriate for people with some regular source of income. It does not serve as a safety net in emergencies Long-term loans are not possible. A limitation is its openness and lack of structure that permit potential abuse. It is a livelihood strategy for women, but benefits could be gained from including men.
So there you have it. Now you can join a savings group!