Chances are, if you are Black and living in America, you have never heard of sou-sou. Sou-sou, nicknamed the ”poor people’s banking system”, is a centuries-old practice that originated in West Africa. It gets its name from the Yoruban term ‘esusu’ which refers to a fund where several people pool their money for a period time (month, two weeks, etc) and after that time is up, one person in the group gets all the money in the pool. They keep doing this till everyone gets their turn and receives that full lump sum at least once. For example, if you have four people contributing $250 weekly, each person take turns getting $1,000 each week until every person has had a turn getting the entire week’s contribution.
The funds could be distributed anywhere from every few weeks to every few years in amounts varying from a few hundred to a couple thousand dollars. Funds can be used for down payments for homes, investing, paying for education, or to launch businesses. Sou-sou is popular with 1st-gen Caribbeans, South Americans, and Africans as a way to save money – especially for those who dont have access to traditional savings accounts from banks.
“When Lamar McKenzie needs money for a security deposit and the rent for a new apartment, he won’t have to run up credit card balances or borrow from relatives. He’ll simply use $4,000 he’s scheduled to receive in a couple of months. The $4,000 is the payout from a sou-sou, an informal savings club that many people in North Jersey ethnic communities belong to. Sou-sou’s (also written su-su or susu) are known by many different names and spellings. McKenzie, 21, of Paterson, is Jamaican and knows the association as a “partner.” Dominicans here refer to it as a sociedad (“society”), or a “san” on the Caribbean island. To many Filipinos, it’s a paluwagan. – Herald News
In a sou-sou, nobody gains or loses more than they put in if the group runs correctly. An organizer or treasurer is responsible for collecting the money each week or pay period. Sou-sous are more financially effective, because members feel obligated to the other members of the group, so they force themselves to pay into it. Sou-sous work because members TRUST one another to keep the system in tact, and thats the hitch for most of us Black men and women in America – we have been trained to NOT trust one another!
A sou-sou is all based on the honor system. There is no legal paperwork, no credits check, no proof of income, no signatures. You must know and trust every participant. There are no laws against sou-sous as long as every member gets exactly what they put into it. However, there is little legal recourse in the event someone is taken advantage of. As per the unwritten rules of sou-sous, the organizer is responsible for making up the difference if a member defaults on their contributions.
Sou-sous are a good idea for those of you who have started Accountability Groups, but dont make the mistake of going out and recruiting random individuals to participate! Sou-sous are usually comprised of close friends, family members or co-workers, and there is an unspoken pressure to honor the commitment. Failure to do so would be like defaulting on a loan and the one who dodges payment can expect to be ostracized by the rest of the community.
“It’s a way to set aside money that you might otherwise waste”, one sou-sou member said. “Instead of saying I’m going to waste this $50, you put it away and know you can get it down the road. That $50 pans out to be $1,200.”
In his discussion of Yoruba associations, A.K. Ajisafe provides a statement of the esusu institution which summarizes its formal operation:
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.
In the principle of pooling funds and rotating the pot among the membership, the Yoruba esusu does not differ from either of its Oriental counterparts; however, in common practice, it exhibits some idiosyncrasies. As W.R. Bascom observed, “anyone who wishes to do so may found an esusu group, provided that others are willing to entrust their funds to him.” But the organizer or president of the esusu needed only to be known; he did not need to know all of the members personally. Once an organizer had announced his intention to sponsor an esuse, persons willing to entrust their money to him indicated a willingness to join. Such personal acquaintances of the organizer, if accepted, became in turn heads of ‘Roads.” There were as many separate roads as there were persons who had directly contacted the organizer and had been scrutinized and accepted by him. As heads of roads, these personal acquaintances of the organizer were entitled to contact their own friends and kin concerning membership in the esusu. Heads of the roads normally were responsible for “collecting the contributions and making the disbursements within their subgroups which consist of members who have applied to them rather than to the founder for admission.” In this manner the Yoruba esusu delegated responsibility for the integrity of all members from the original organizer to managers known and appointed by and accountable to him.
The Yoruba esusu was apparently carried to the Americas by African slaves. Indeed Bascom bases his argument for the indigenous African origins of the esusu on the persistence in the West Indies of the same custom among the descendants of 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 this 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.
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. Many Jamaican petty traders used their partnership ‘draw’ to restock their stalls with imported goods for which they were required to pay cash. The partnership constituted the “most important source of capital for petty traders.”