Are West African Sou-Sou Savings Clubs The Next Financial Trend?

If you are Black and living in America, you have probable never heard of sou-sou. But this centuries-old practice could become the next trend in group economics.

Sou-sou gets its name from the West African Yoruban term ‘esusu’ and works like this:

Several people pool their money together and give the entire pile to one person. A treasurer collects the money from the members every pay period and distributes it to the eligible member.

Funds are distributed anywhere from every few weeks to every few years in amounts varying from a few hundred to tens of thousands of dollars. The group will keep doing this until everyone gets their turn and receives that full lump sum at least once.

For example, lets say you have four people contributing $250 per month. Each person take turns getting $1,000 each month until every person has gotten their lump sum.

Why Would Anyone Join A Sou-sou?

Sou-sou are like forced savings plans. No money is being made by the group, and no money is being spent by the group. The same $250 that you deposit in the example above is still there.

The beauty of a sou-sou is that if you have a large payment on the horizon, a sou-sou can help you raise the funds you need quickly. Sou-sou have been used to buy homes, businesses, and cars. Despite being based on trust, of those who had ever joined a sou sou …

If you wonder how African immigrants get to the United States with no bank account and succeed in such a short period of time, sou-sou are part of the answer!

How Do Sou-sou Members Maintain Trust With One Another?

A sou-sou is all based on the honor system. There is no legal paperwork, no credit check, no proof of income, no signatures. Sou-sous work because members TRUST one another to keep the system in tact.

Obviously, it’s important to know and trust everyone in your circle. But if someone takes off with the pot, there is little the rest of the group can do about it (at least legally ?). Luckily, there are ways to keep everyone accountable.

• In some circles, the organizer is responsible for making up the difference if a member doesn’t pay up.
• Sou-sou members are usually family members, so its fairly easy to track down an offender if they try to take off with the pot.
• Non-family sou-sou can include church members, co-workers, and organizational members.
• Most people are documented, so collecting personal information from others can serve as a deterrent. Some sou-sou use contracts and personal documents like birth certificates as collateral for members who might not be closely affiliated.

Sou-Sou As A Yoruba Tradition

I first learned about Sou-Sou while reading The Laws and Customs of the Yoruba People. In the book, author A.K. Ajisafe wrote:

There is a certain society called Esusu. This society deals with monetary matters only, and it helps its members to save and raise money thus: Every member shall pay a certain fixed sum of money regularly at a fixed time (say every fifth or ninth day).

And one of the subscribing members shall take the total amount thus subscribed for his or her own personal use. The next subscription shall be taken by another member; this shall so continue rotationally until every member has taken.

The Yoruba esusu was carried to the Americas by African slaves. An early reference mentions the practice of asu in the British Bahamas in 1910:

Another method of promoting thrift is apparently of Yoruban origin. Little associations called ‘Asu’ are formed of one or two dozen people who agree to contribute weekly a small sum toward a common fund.

Every month the amount pooled is handed to a member, in order of seniority of admission, and makes a little nest-egg for investment or relief. These ‘Asu’ have no written statutes or regulations, no regular officers, but carry on their affairs without fraud or miscalculation.

Sou-Sou Practice In The Americas

In the Trinidad village studied by M.J. Herskovits, residents referred to their rotating credit association as susu. As Herskovits observed, the term is clearly a corruption of the Yoruba esusu.

Trinidadians originally from Barbados and Guiana told Herskovits of the form of the susu in their birthplaces. In Barbados the rotating credit association was commonly known as “the meeting” and in Guiana as ‘boxi money.”

According to Herskovits, the Trinidadian sus ‘takes the form of a cooperative pooling of earnings by those in the group, so that each member may benefit by obtaining in turn, and at one time, all the money paid in by the entire group on a given date. Members may contribute the same amount. The total of the weekly contribution…is called ‘a hand.’

Jamaicans refer to their rotating credit association as ‘partners’. The partners in Jamaica is headed by a ‘banker’ and the membership is composed of ‘throwers.’ In operation the club is apparently identical to the susu of Trinidad.

In the Jamaican setting, however, members apparently used their partnership portions for business capitalization, whereas rural Trinidadians appear to have made use of the fund only for consumption purposes. The partnership constituted the “most important source of capital for petty traders.”

There are so many advantages of a sou-sou – from building much needed trust in the Black community to developing  financial discipline – that with more awareness we believe more Black churches, organizations, and communities may be more willing to give them a try.

Sou-sou are truly group economics in action!