From building trust in our community to developing financial discipline, sou sou might be the wave of the future.
If you are Black and living in America, you have probably never heard of sou-sou. But this centuries-old practice could become the next trend in group economics.
Courtesy of Pan-African Alliance
Sou-Sou is a Yoruba tradition. In the book, The Laws and Customs of the Yoruba People. 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).
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, let's say you have four people contributing $250 per month. Each person takes turns getting $1,000 each month until every person has received their lump sum.
Why Would Anyone Join A Sou-sou?
Sou-sou is a savings plan. 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 has been used to buy homes, businesses, and cars.
Despite being based on trust, of those who had ever joined a sou sou …
One-third had been members of a sou sou in the past
Average amount contributed: $200
92% contribute monthly, the rest contribute weekly
13% said they had been “burned” in a sou sou
71% said they will join another 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 is part of the answer!
A sou-sou is all based on the honor system. There is no legal paperwork, no credit check, no proof of income, and no signatures. Sou-sous work because members TRUST one another to keep the system intact.
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 Guyana 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 Guyana 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 are 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 is group economics in action!