If you are one of those people who just cannot get themselves to save money for a rainy day, a sou-sou may be just what you need to build up that little nest egg you have heard your girlfriends brag about.
A sou-sou (also spelled sou sou, su-su or susu) is an informal rotating savings club, where a group of people get together and contribute an equal amount of money into a fund weekly, bi-weekly or monthly. The total pool, also known as a hand, is then paid to one member of the club on a previously agreed-on schedule. The pool rotates until all members have received their share.
Here is how sou-sous work: The group elects a treasurer who will collect the members' contributions. She will also create a payout roster, or members can request to receive their hand at any given date during the cycle. Everyone agrees on how much and how often they want to contribute. If ten members are contributing $100 a week, each week a member will receive a $1,000 hand or cash lump sum. The cycle begins again after ten weeks. Any member who can afford it, can also double their contribution and get paid two hands in one cycle.
There is no interest to be collected, so you will always get out the exact amount that you put into the pot.
Sou-sou, which comes from the Yoruba term “esesu,” originated in West Africa, but is practiced in many African and Caribbean countries. Over the years, sou-sou has evolved, but the basic concept remains the same. Somalis call it “hagbad" or “ayuuto”; in Jamaica, it is known as a “partner”; in Guyana, a “box hand”; Haitians call it a “min”; and if you are Southern African, you may know it as “stokvel.”
The Yoruba esusu was transported over to the New World by African slaves and, while it is little known to African-Americans today, it is still popular among some African, Caribbean, Latino and Asian immigrant communities. Some use it to start businesses, others for big purchases, vacations, down payments on properties and cars and even to send their kids to college.
As old folks tell it, in the past, housewives who didn’t have an income and those in rural communities who had no access to traditional banks used sou-sous. The women would save a little bit of money from whatever their husbands gave them and put it in a sou-sou to be able to treat themselves when it was their turn to receive a hand.
This “under the mattress” method of saving may seem archaic for today’s society, but sou-sous can be a useful accountability tool if you do not have the discipline to save on your own. If you need a lump sum but cannot get a credit card or loan from a traditional financial institution due to a bad credit history, a sou-sou may also be your answer.
Since sou-sous are not regulated by any laws and can, therefore, be risky if someone untrustworthy joins, if you are considering joining one make sure it is with people that you know well and trust. Usually, sou-sou members are from the same family or a close-knit community.
There are no legal paperwork or credit checks involved when starting a sou-sou, all you have to protect you and your money is the familial trust between the members. So pick who you save with wisely.