Written By: N. Amma Twum-Baah The terms savings and investments are nothing new to the average African man or woman, nor are the concepts in banking introduced to the continent through Western civilization/ideas. Long before colonization Africans were saving and investing in their future. Whether it was through the birth of multiple children, investing in livestock, or cattle, or the Susu system, there was always the underlying sense of investing in the future. Sitting around the kitchen table, these five professional women seem anything short of the ‘susu’ type. Mary is a registered nurse at a prominent hospital, and a mother of three. Margaret (Maggie) is a licensed cosmetologist, and mother of one. Nana Afriyie is a pharmacy aide studying pharmacy part-time, and a mother of one. Nana Adoma is a full time law student, and so is Nchike, who is also a mother of three. With the exception of Nchike who is from Nigeria, all the other ladies hail from Ghana. All five are in their late twenties to early thirties. So, what brings five women from such diverse cultures, professional goals and careers together around the same table? It is the shared desire to save a portion of their monthly earnings for the future the old-fashioned way through Susu – where their money is safe from late fees, insufficient fund fees and/or overdraft fees. What is Susu? Margaret describes Susu as an archaic system of saving that is based solely on trust and cooperation among those involved. Africans, in years past, were widely known to save their money in the most bizarre ways (money under mattresses, stuffed in women’s bras, hid in lidded jars under the bed etc.). As bizarre as these practices seem now, they proved more successful and safer than saving money in the bank where corrupt bank officials were likely to pilfer a person’s life savings in a matter of minutes. Of all the unusual ways of saving, the one method that has survived the emergence of the banking industry, and made its way across oceans, is the Susu method of saving. Susu is a method of saving between friends (not always). Money is contributed to a single account on a frequency agreed to by those involved. At the end of the agreed-upon period, the total amount collected is given to one person in the group and the cycle starts again, the money given to the next person on the list, until everyone involved has gotten their fair share of the money. How it Works: The five ladies - Mary, Maggie, Nana Afriyie, Nana Adoma and Nchike - are members of a Susu club that started out between Nana Adoma and Nana Afriyie. According to Nana Afriyie, the group sets a dollar amount to come out of each member’s paycheck each pay period, that each can afford without experiencing any financial hardships.. The amount is collected and deposited into a single account. At the end of three months (the group’s agreed upon time frame) the account is depleted and the money is given to the member in line to collect. In more simple terms, say the amount contributed out of each paycheck is $50 every two weeks. That amounts to $ 100 a month from each member. At the end of the three month period, the total amount collected ($1500) is taken out of the account and given to the first person in line to collect. The cycle will begin again and the next person in line collects after three months, and so on till each member has gotten a share. Then they start all over again. See the chart below for a better idea of how the money is distributed.
The Benefits of Susu: Susu is a system, as indicated earlier, that takes trust and loyalty to succeed. These five women have been a Susu club for almost five years, and it works for them. Through susu, Adoma has been able to survive the financial hardships of law school, Afriyie came up with seed money for a down payment on her condo, Mary is able to support both her family in America, and her extended family back home, and is building a posh house (with her husband) in Accra, Maggie was able to minimize her debt and pay off most of her student loans. The remainder she says she has set aside in an educational fund for her daughter. Nchike was able to buy a car without having to make any monthly payments. It also serves as a support system; a financial support group if you will. Nchike says she is glad she joined this trustworthy group of friends because she would not have been as financially disciplined as she is today without their help. “With this system, it’s like you have a savings account to fall back on, but you can’t take your money out until it’s your turn to collect. The wait can sometimes be daunting, but you have to be patient and wait your turn. When you do get your payout, however, it is so worth the wait.” To be fair, the ladies agree that the full-time students collect first, before those with full-time careers and money to spare. The Pitfalls of Susu: Susu can be a tricky and sometimes risky business if entered into with the wrong intentions, and the wrong group of people. The ladies jokingly narrated an incident that happened to a group: After two members of a Susu club collected their monies, they bolted and were never heard of again leaving two people who had contributed for several months without their share to collect. Though we laughed about this occurrence, it is no laughing matter for those who find themselves stiffed by the people they thought they could trust. Nchike also warns that this method of saving is not for those eager to collect their money because it takes a lot of patience and time. Mostly, the larger the group the longer the wait time so it is advised that the groups be kept small – no more than five people at a time. Joining, or forming a Susu club can be a financially rewarding experience. It is not to replace conventional banking (checking and savings accounts), but serves a wonderful purpose in other ways as is evident by the five ladies above. In a country where spending so often outweighs saving, and money in the bank can sometimes mean no money at all, it is a relieve to see that some good old-fashioned traditional African practices such as these have found their way across the Atlantic. |
