A new pension fund, Donhodzo Micro-Pension Fund, has entered the market to tap into the low-income earner segment and the country's informal workforce, NewsDay Business can report.
The informal sector is cash-rich, estimated to be generating over US$14 billion annually.
However, there appears to be no suitable products to tap into this sector.
Donhodzo’s entrance into the market comes at a time when confidence in the multi-billion-dollar pensions industry remains fragile, following years of economic volatility that wiped out many retirement savings.
Launched in 2024, Donhodzo operates under two subsidiaries — Donhodzo Micro-Pension Fund and Donhodzo Microfinance.
In an interview with NewsDay Business, Donhodzo group managing director Shamiso Soda said the company seeks to address a critical gap in Zimbabwe’s pension landscape.
“We identified gaps in the traditional pension system, which mainly cater to the elite — those with payslips. Yet, if you look at it today, about 80% of Zimbabwe’s economy is now informal. Many workers in this sector end their careers with no financial safety net,” she said.
“Some are employed by big players but have no pension plans, not even voluntary ones. They rely solely on NSSA [National Social Security Authority], which is mandatory. But what about vendors, tobacco farmers, or small-scale cotton producers? Not every sector is aligned with a pension fund. That’s another gap we’re trying to fill.”
Traditional pension schemes often require fixed monthly contributions and payslips, a barrier to entry for informal workers as they remain undocumented.
“Some funds start at US$50 monthly and don’t accept walk-in clients. But what if someone earns income today and wants to contribute? Contributions can start from US$1, and payments can be made daily, weekly, or monthly,” Soda said
Contributors have the option to save in either local currency or US dollars, with retirement benefits paid out in the same currency.
Donhodzo will offer a range of pension plans customised for different income levels.
SMEs and small business owners can also integrate pension contributions as employee benefits.
“It’s a portable pension. You carry your reference number throughout your life, employers and employees can split contributions, or the employer can pay the full amount,” Soda said.
The fund set the retirement age at 55 for the tobacco sector, recognising the physically demanding nature of informal work.
The fund’s membership rules and retirement age have been approved by the Insurance and Pensions Commission (Ipec).
“We also allow up to 50% withdrawals while you’re still working after a year of contribution,” Soda said.
The fund has over 250 active members, including individuals and companies contributing on behalf of employees.
Beyond financial products, Donhodzo is actively investing in financial literacy through community outreach and roadshows.
This is meant to demystify pension products and promote long-term savings.
“Informal workers contribute to the economy, and our private pension scheme channels those contributions toward national development.”
