Mchezo: Digitising Informal Savings for Greater Financial Inclusion among MSMEs
Mchezo groups run on cash, manual records and trust, and in Afropavo's survey delayed payments affected about 40% of respondents. On 10 November 2026 Afropavo, Vodacom M-Pesa and Absa Bank launched a digital version that sits on the M-Pesa menu and keeps the money in a regulated bank.
Informal savings groups have long played an important role in Tanzania’s financial ecosystem. One of the most widely practised mechanisms is Mchezo, a form of rotating savings and credit association (ROSCA) in which members contribute predetermined amounts at regular intervals, with the accumulated funds paid out to members according to an agreed arrangement. For individuals and micro, small and medium enterprises (MSMEs), these groups provide an accessible way to accumulate capital and meet financial needs, particularly where access to formal banking services may be challenging.
Beyond saving, Mchezo enables individuals and businesses to mobilise lump sums for specific needs. ROSCAs in Tanzania and across East Africa have been used to finance school fees, medical expenses, food, business establishment and expansion, and the acquisition of assets.
However, traditional Mchezo arrangements are largely managed manually, creating challenges around payment delays, record keeping, transparency, trust and the security of funds. In response, Afropavo, in partnership with Vodacom M-Pesa and Absa Bank, developed and launched “Mchezo”, a digital platform designed to strengthen the administration of this established financial practice.
Officially launched on 10th November 2026, the tripartite partnership combines Afropavo’s technological capabilities, Vodacom M-Pesa’s telecommunications and mobile financial infrastructure, and Absa Bank’s role as the regulated financial institution safeguarding the funds.
Tanzania’s changing financial landscape
Mchezo's launch comes amid significant digital transformation in Tanzania’s financial sector. Mobile money has become one of the country's most widely adopted channels for accessing financial services. According to FinScope Tanzania 2023, 72% of Tanzanian adults used mobile money. Bank of Tanzania data recorded 60.75 million active mobile-money accounts in 2024, alongside approximately 6.6 billion mobile-money transactions during the same year. These figures demonstrate how deeply mobile financial services have become embedded in everyday economic activity.
Understanding the challenge
Mchezo’s development was informed by research conducted by Afropavo into the operations of informal savings groups and the challenges faced by their participants. The study collected more than 300 valid survey responses, representing the reported experiences of approximately 1,500 individuals.
The findings highlighted several operational challenges. Delayed payments affected approximately 40% of respondents overall, while 86% of MSME respondents primarily used cash for contributions. Manual record keeping was also widespread, with 76% of MSME respondents relying on manual methods to track their Mchezo activities.
Despite these challenges, participation remains significant. Current participation stood at 66% among online users and 63% among MSMEs, compared with 49% among office workers. The research also identified distrust, concerns about fraud, inconsistent contributions and transaction fees as barriers affecting participation.
These challenges can create discrepancies and disputes, particularly when members have limited visibility over group contributions and payouts. Reflecting this need, 64% of MSME respondents identified real-time tracking as a desired feature, while 71% cited security as an important factor that could encourage them to adopt a digital Mchezo platform.
From research to product development
Afropavo’s role extended beyond technology provision. By researching existing savings practices and identifying their operational weaknesses, the company translated these findings into the design and development of Mchezo. The objective was not simply to digitise the process, but to improve its administration while retaining the fundamental structure of collective saving.
The platform allows users to establish savings groups digitally, with a minimum of three members and no maximum group size. Each group must have a designated leader and treasurer.
Transparency is central to its design. Whenever money is added, received or removed from a group, members receive notifications, providing greater visibility over financial activity. Users can also track contributions and access their payouts through the digital system. The platform incorporates interest for members, while maintaining payouts as a fundamental part of the savings arrangement.
A tripartite approach to financial inclusion
The partnership brings together three complementary roles. Afropavo is responsible for the technology, including the platform’s design, development and USSD integration. Vodacom M-Pesa provides the telecommunications and mobile financial infrastructure through which users access the service, while Absa Bank provides the regulated financial infrastructure for safeguarding the funds.
This division of responsibilities is particularly important given the need for an appropriate regulated institution to hold and safeguard substantial customer funds. By combining technology, telecommunications and formal banking infrastructure, Mchezo connects an established informal savings practice with the wider financial system.
Improving transparency and accountability
For MSMEs, digitising Mchezo offers benefits beyond convenience. Small businesses often operate with limited administrative resources, making processes that depend on cash handling, physical records and manual follow-ups particularly demanding.
Mchezo introduces digital records and shared notifications, ensuring that members are informed whenever funds are added, received or removed. This reduces reliance on individual administrators to communicate financial activity and directly addresses concerns identified in Afropavo’s research, including delayed payments, poor record keeping and distrust.
By improving visibility and accountability, the platform seeks to strengthen the management of savings groups without removing the social and cooperative principles that make them effective.
Accessing Mchezo
Mchezo is available through Vodacom M-Pesa. Users can access the service by navigating to the *150*00# Huduma/Financial Services section of the M-Pesa menu and selecting option 9, MCHEZO.
Ultimately, Mchezo represents an effort to bridge two parts of Tanzania’s financial landscape: the established informal mechanisms through which individuals and businesses save collectively, and the growing digital infrastructure of formal financial services. By combining Afropavo’s research and technology, Vodacom M-Pesa’s mobile financial infrastructure and Absa Bank’s regulated banking framework, the partnership aims to make an established financial practice more transparent, secure and accessible to Tanzania’s MSMEs.
