A Susu

(The weekly series - Pocket Money - where I explain financial basics in fewer than 200 words. Feel free to make suggestions!)

A Susu (or Esusu) is an informal, community-based savings and lending scheme, practised for centuries across West Africa and the Caribbean. Similar schemes exist in other areas of Africa, South Asia and their diasporas. 

A group of people - usually friends, family or colleagues, and often women - agree to contribute a fixed sum of money at regular intervals (usually weekly or monthly). When the pot is collected, a group member receives the entire pot. This continues until every member has received the pot, then it ends or starts again. Who receives the pot is decided by agreement or drawing lots.

There is no interest associated with this but, especially if you receive an early pot, you get access to a lump sum which you wouldn’t otherwise have had - essentially an interest free loan.

The system works on trust and social accountability as there is no legal contract. The scheme is usually organised by a well regarded and trusted member of the community. It has been, and is, essential in accessing lump sums for those communities who have faced and still face barriers to accessing mainstream financial services. They also play a role in building and maintaining strong community ties.

Love Eleanor. xxx