Low-income residents upgrading informal settlements in Zimbabwe

Women-led, local savings groups from slums in Harare are leading the upgrading of their informal settlements, addressing local communities’ housing and basic service needs, and enhancing climate adaptation through the installation of solar energy systems and other infrastructure.

Limited or no access to financial services presented a huge barrier to communities in the informal settlements in Zimbabwe’s capital that grew rapidly as a result of the mass migration from rural to urban areas that occurred post-independence. With a lack of government recognition, communities faced eviction, relocation and the threat of their homes being demolished.  

In time, these marginalized communities mobilized, which led to the emergence of the Zimbabwe Homeless People’s Federation (ZHPF), a federation of low-income urban communities that has drawn on the experiences of other locally led funding models around the world. In 1999, the organization created the Gungano Urban Poor Loan Fund, which is still helping to upgrade informal settlements over two decades on.  

The term ‘Gungano’ is derived from the Shona word for ‘gathering’, as the fund is based on pooling community savings together, combining them with funds provided by donors, and then providing loans to groups of individuals, which are organized in solidarity loan or savings groups. The project is structured around a combination of women-led daily and weekly savings meetings. These represent the only means by which many local people are able to secure a loan and save for the future.

The savings funds are invested in a wide variety of different projects. These include purchasing land and upgrading residents’ homes, improving drainage, sanitation and other services, and investing in health services and developing residents’ business skills.

Key to the approach is that improvements are made incrementally. Families are, for instance, able to build or upgrade their houses one room at a time, which ensures the improvements work and financing are both affordable and sustainable.

“I started saving USD 1.00 per month towards Gungano in June 2009,” explains Beauty Guyo, a member of Zimbabwe Homeless Peoples' Federation. “Gungano has been faithful. I got incremental loans over the years which enabled me to complete a five-room house. Gungano trained me in livelihood skills, and I make a living from chicken rearing in my backyard and garment making. Without Gungano support I would have been displaced during the Murambatsvina evictions in 2005."

In total, ZHPF supports more than 1,700 different grassroots collectives, each of which consists of 20 families. Members of the citizen financing initiative are expected to ensure that loans are repaid within a specified timeframe and are charged an affordable interest rate. Loans paid back to the fund then help create opportunities for other members of the community saving groups to implement their own upgrading projects. 

Although the initial driver for the fund was to create a locally led solution to upgrade living conditions in Harare’s informal settlements, the different projects it supports have improved the climate resilience of local people. With changing weather patterns as a result of climate change leading to more intense droughts and floods, the installation of dry ‘sky loos’ will help those living in flood-prone areas to adapt, while the use of new solar energy systems will make it possible to undertake repairs to homes in the event of power loss following extreme weather events. 

In addition to the financial assistance it provides, the Gungano Urban Poor Loan Fund has helped to demonstrate that local communities can be proactive stakeholders and have an important role to play in urban planning. The urban poor today have a platform to engage with the government and donors, which in turn means they are better able to secure land access and rights to land, reform planning policies, and upgrade housing and the provision of much-needed services. Furthermore, as the scheme is locally led, the fund is able to ensure that finance reaches local levels in a way that large development agencies and foundations are often able to achieve.

The Gungano Urban Poor Loan Fund is supported by a number of local and international partners. These include civil society partner Dialogue on Shelter for the Homeless in Zimbabwe Trust (DSHZT), Harare city funds, and philanthropists and international organizations such as the Bill and Melinda Gates Foundation, DFID, SELAVIP (Latin American, African and Asian Social Housing Service), SDI Urban Poor Fund International, MISEREOR, International Institute for Environment and Development (IIED), Homeless International, Global Poverty Action Plan (GPAF) and USAID.