Zimbabweans Warned Against Informal Savings Practices

The Deposit Protection Corporation of Zimbabwe (DPCZ) has issued a strong warning against the risks of unregistered savings groups and pyramid schemes, commonly referred to as mikando.

During a breakfast meeting held in Mutare, DPCZ Chief Executive Officer Hopewell Zinyau emphasized the importance of using formal banking channels to safeguard funds.

Mr. Zinyau explained the DPCZ’s role in protecting depositors’ money through a managed fund that offers compensation in the event of bank failures.

“We compensate depositors up to US$1,000 for banks and US$500 for deposit-taking microfinance institutions, ensuring their funds are secure,” he stated.

He expressed concern over the growing reliance on unregistered savings methods like mikando, warning that such systems offer no financial protection when they collapse.

“We urge people to avoid unregulated financial systems. If these schemes fail, there’s no safety net for the participants,” Zinyau cautioned.

The meeting brought together bankers, special interest groups, and media representatives, focusing on enhancing financial inclusion for marginalized communities.

Godfrey Dzveta of Tariro Foundation Zimbabwe commended the DPCZ for its efforts, highlighting the campaign’s impact on raising awareness about secure banking practices.

“This initiative underscores the benefits of banking with registered institutions, where deposits are guaranteed and compensations are assured in case of bank failure,” Dzveta remarked.

He stressed the importance of inclusive financial education, particularly for vulnerable groups like persons with disabilities, to promote economic participation.

The foundation also proposed training programs to empower communities, advocating for initiatives that support income-generating activities and broader financial literacy.

Unregulated financial systems have caused significant losses for Zimbabweans. Pyramid schemes and mikando frequently collapse, leaving participants in financial distress.

DPCZ’s campaign seeks to mitigate such risks by promoting formal banking systems, which ensure safety and financial stability for depositors across the nation.

As Mr. Zinyau noted, depositing money through formal channels provides not only convenience but also critical protection for the future.

This nationwide campaign aligns with efforts to strengthen Zimbabwe’s financial system while fostering trust in regulated banking institutions.