The victim, believed to be in his 70s, was withdrawing cash from a bank in King Street when a woman pounced and snatched his money.
Hearing the man yelling for help, the courageous group chased a woman down Windmill Street and pinned her to the ground until police arrived.
One of the men who gave chase, but asked to remain anonymous, said the woman was trying to headbutt and spit at people as she was restrained.
He said: "They held her to a gate across the road until the police turned up, and they didn't arrive for quite some time.
"She looked about 40 to 45 and was English."
"The man got his money back. It was a day when Gravesend really pulled together..." - florist Frankie Davison
It is believed the money, about £165, was taken while the man was at the NatWest bank at the junction with King Street and Windmill Street.
Frankie Davison, owner of Flower Pot florist in Windmill Street, said: "The victim was just a little old man with a walking stick and when he was getting cash out a woman grabbed at it.
"Apparently he was screaming 'she's got my money' and about 40 people chased her and held her down.
"The man got his money back. It was a day when Gravesend really pulled together."
Police said a 30-year-old Gravesend woman has been arrested on suspicion of robbery and bailed until Wednesday, October 8 pending further inquiries.
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