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Village Banking and Cilimba groups are Rotating Savings and Credit Associations (ROSCAs) which are groups as old as time. They are informal groups where individuals, who are usually friends, colleagues or family come together and decide to save, lend or invest money together.

Village Banking Vs Cilimba


• Both Village banking and Cilimbas are groups of people who agree on an amount to be paid during each cycle. Cycles are usually monthly but can be weekly or bi weekly.


• Cilimba is a none interest earning savings group. In this scenario, 3 or more people come together and decide to rotate who receives the money in each cycle. For example, in January– Jane receives K1, 000 from both John and Joshua. She therefore has K2, 000 plus her own K1, 000. In February Jane would give K1, 000 to John and in March she would give K1, 000 to Joshua. In April, she would once again receive K2, 000. In essence, what Jane would have done is to allow John and Joshua to keep K2000 on her behalf so that she could use it in March.

• Village Banking is an interest earning and lending savings group. In this scenario, 3 or more people would still come together however they would put money together every month for the purpose of lending that money and earning an interest. In Village banking, a minimum amount that should be invested every month is agreed upon. The minimum amount is equal to 1 share. During the meeting all the money is lent out to members of the group at an interest that is already decided. Borrowing members can only borrow a certain amount depending on how much they save. At the end of a cycle which could be 6 months or a year, all loans must have been repaid and interest is shared according to the shares of each member.

Both Cilimba and Village Banking were associated with rural women but more modern middle income earning and high earning professionals are now forming groups and using this as a way to save and invest.

Going back to Jane, Joshua and John’s example: in village banking, the minimum share may perhaps be K200. Hence if Jane contributes K1000 she has 5 shares. If Joshua contributes K600 and John contributes K400 then they have 3 and 2 shares respectively. In percentage terms, that means Jane is entitled to 50% of the interest while Joshua is entitled to 30% and John is entitled to 20%. The total amount invested would be K2000. If the agreed interest rate that it should be lent out is 10% that means that the interest earned would be K200 in the next month and Jane will get back her K1000 + K100.


• The benefits of village banking is the ability to earn an interest while also the ability to have access to capital that one would not usually have access to.

• Cilimba allows you to save money to use in the future


• Both of them rely on trust and may always have a chance of defaulting members.

Using Formal Financial Institutions

It is very important for money to be in circulation in the formal economy hence here are a list of recommendations of financial institutions that can help you manage your village banking or cilimba groups. Using financial institutions may also provide your group with track records which can give you access to greater finance. Be sure to read up on various ways to save from my last post on savings and you may find an avenue to save that works for you.

Stella Sata

" Stella Sata is Head of Operations at BroadPay, a payments company based in Lusaka Zambia. She’s also 25 years old and has a plethora of accomplishments to her name. She’s a Masters Degree holder, a Mandela Washington Fellow, BOZ Governor’s Award winner and a successful entrepreneur."