Econet Life’s Dura/Isiphala to stimulate informal sector savings

30 Sep, 2022 - 00:09 0 Views
Econet Life’s Dura/Isiphala to stimulate informal sector savings Michael Makuza Business Reporter TELECOMMUNICATIONS giant, Econet Wireless Zimbabwe Limited, has capacitated 44 500 learners with scholarships through its flagship learning support programmes aimed at contributing to quality education and skills development in the country. In a statement accompanying its financial report for the half year ended 31 August 2022, Econet board chairman, Mr James Myers, said the group continues to invest in the communities and has accelerated community outreach activities through initiatives under three strategic pillars - Education, Global Health, and Rural Transformation and Sustainable Livelihoods. “Our efforts through our implementing partner, Higherlife Foundation, positively contributed towards human capital development through its flagship scholarship programmes, where more than 8 500 learners were supported with scholarships,” he said. “36 000 students were awarded technological scholarships to access the Akello platform in a bid to catalyse access to quality education.” Meanwhile, the group said it continues to complement Government efforts in scaling up support for climate-smart conservation farming (Pfumvudza/Intwasa) through training, provision of inputs and extension services to small-scale farmers. Mr Myers said under the Transformation and Sustainable Livelihoods theme, they focus on continuous technical advisory services and harvesting for rural farmers that are trained and supported with farming inputs at the start of the farming season. The group’s initiatives under the health pillar continued to complement the activities of the Ministry of Health and Child care. “Our activities chiefly focused on improving health outcomes in maternal and neonatal health in referral hospitals; preventing the further transmission of neglected tropical diseases by 2025; elimination of cholera by 2028; and catalysing Zimbabwe’s ability to prepare and respond to public health threats, emergencies, and disasters.,” he said. This year, the group has been placing large-scale and high-tech critical maternity ward equipment, as well as providing Emergency Obstetric and Neonatal Care (EmONC) training to eight maternity wards in Zimbabwe’s major referral and provincial hospitals. During the period under review, Econet Wireless Zimbabwe recorded inflation-adjusted revenue of $112,4 billion, which represents a decline of one percent compared to $114,0 billion recorded in the same period last year. econet

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ECOCASH Life’s recently launched Dura/Isiphala Pension Fund, mainly targeting employees in the informal sector, such as carpenters, taxi drivers, house maids, gardeners, welders, cobblers and traders among others, has all the ingredients necessary to encourage a savings culture and provide a social safety net for the elderly. 

Zimbabwe, according to the international Monetary Fund, has the second highest informal sector in the world, after Bolivia. 

However, this important sector, which houses more than 60 percent of the country’s workforce, has no savings or retirement funds to back them up. 

The introduction of Dura/Isiphala Pension Fund is changing all that. This innovative programme from EcoCash Holdings life assurance business, provides workers in the informal sector with a voluntary mechanism for pooling and investing their savings. 

Signing up for Dura/Isiphala is quite easy for any Zimbabwean aged between 18 and 55 years. Registration and contributions towards retirement start from as little as US$10, and this can all done at Econet Shops, Steward Bank, AFC Bank and EcoSure bases across the country.

Soon after registration, beneficiaries will be in a position to use the investment as collateral to access short term loans, earn interest and access a portion of their investment after 12 months. 

The key to the success of this innovation is the realisation that low-income earners can easily make small contributions towards retirement savings at a relatively low cost, with flexible withdrawal conditions and ease of participation.

Dura/Isiphala has struck a delicate balance between the need for long-term savings and imminent demands of life that necessitate early withdrawal in certain circumstances.

Econet Life said it came up with the idea of Dura/Isiphala because it understands that addressing the concerns of old-age financial security among workers in the informal sector is important due to its large size.

“Old-age financial security is of particular concern for women as they generally outlive their male counterparts. This concern is heightened by the fact that women tend to have lower labour force participation rates than men, have less access to property, and have weaker ownership rights than their male counterparts,” the company said. 

“Women also tend to rely more on informal employment. Even when employed in or retired from the formal sector, women face disadvantages relative to men in ensuring old-age income security. They tend to have lower earning capacity than men and often exit the labour force to bring up children.”

Benefits of Dura/Isiphala 

The fact that members can make such small contributions towards pension saving without the risk of penalties is helping to demystify the notion that saving for later in life is only for people with disposable income. 

Moreover, the fact that there is no need to engage directly with formal financial institutions removes a common barrier to participation for informal-sector workers. 

The scheme’s design has a number of attributes that contribute to its effectiveness. A key advantage is that all contributions from informal-sector workers are pooled together. 

This creates economies of scale in the investment of funds and there is one reference point for the worker’s retirement planning needs. 

A second benefit is that members are allowed the flexibility to contribute what they want every month and from anywhere in the country.

The fund is also helping to increase financial literacy by raising awareness of the importance of saving for the future to ensure income smoothing across the lifecycle. This includes education regarding the importance of insuring against longevity risks and emphasising that there is a possibility that people will live longer than expected, which could become costly.

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