Is Your Grandmother's Sou-Sou Savings Club the Key to Community Wealth Building?

This West African participatory system isn't new but it could be the answer to escaping the discriminatory limits of conventional banking systems.

Three older women talk around a kitchen counter.
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As a child, you were probably taught the importance of saving money. Safekeeping money given by the tooth fairy and putting birthday money into a piggy bank were common ways to do this but you may also have heard your parents, grandparents, or other relatives talking about the communal saving practice of sou-sou.

A su-su, or sou-sou, is an informal, rotational saving method in which a small group of trusted people contributes a fixed amount (e.g. $50 or $100) to a pool of money on a fixed basis (e.g. weekly or monthly). Each month, the pot goes to a different person until everyone in the group has collected. It’s essentially a form of mutual aid based on community and shared commitment. There’s no interest or profit accrued over time and you get back exactly what you put in—no gain, no loss. The arrangement enables people to save and periodically have access to a lump sum of capital.

The practice is thought to have originated in pre-colonial Nigeria before spreading to other West African countries such as Ghana. It then migrated to the Caribbean through the Transatlantic slave trade and was eventually brought to the US via immigrants. The term su-su comes from the Yoruba word Esusu and it refers to a community fund. Among the Igbo people, it is spelled Isusu. In the Hausa region, it is known as Adashi.

Community Building and Reciprocity

Dr. Caroline Shenaz Hossein, University of Toronto professor and founder of The Diverse Solidarity Economies Collective, describes sou-sous as ROSCA. “It stands for Rotating Savings and Credit Associations and it’s the academic term for money pooling co-op banks, known locally as Susu, Hagbad, Padner or Chamas, etc. among African-descended people. ROSCA is a global institution practiced around the world.” 

“It is rooted in membership, community building, and this idea of reciprocity,” she explains. “This ancient economic system of collectivity has helped people of African descent to mitigate daily harms, violence, and erasure by creating their own economic solidarity systems and engaged citizenry.” Community-economic practices, such as sou-sous, were historically developed by disenfranchised communities as a response to bias and exclusion from global financial markets as well as the denial of access to commercial banking institutions.

“But know that ROSCAs, or susus, are far more than just a financial transaction, it is about community development, engaged citizenship and building up comradery among excluded people,” Dr. Hossein mentions.

Sou-sous are intrinsically linked with maintaining community life and the encouragement of a people-led economy. They emphasize a strong focus on community well-being without the individualistic and conformist ideologies found in mainstream banking. Importantly, sou-sous contribute to bottom-up development within the community.

More Appealing Than a Bank

There are a few key factors that make sou-sous appealing. The first is accountability—there is an unspoken pressure to continue to add to the pool of money as members don’t want to disappoint the rest of the group by failing to commit. Members are dependent on each other. This can be viewed as a form of positive peer pressure to save and serves as a reminder to follow through on the promises we make to ourselves.

The second factor is the value that comes from pooling resources—sou-sous offer the opportunity to share risk so that if one member has a financial emergency, the rest of the group can mobilize to pay the pot of money out to that person earlier. "Those who receive the funds early in the cycle may be considered to have borrowed money from the group while those who receive funds later are deemed savers; borrowers pay no interest and savers receive no interest income,” Dr. Hossein highlights in her 2023 essay on the West African System of Collectivity.

The third factor is the social desirability of sou-sous—through them, social ties are recognized, social relationships are maintained and they encourage members to think beyond self-interest. The informal system is useful in sharing ideas and building a strong civic society rooted in reciprocity and equal distribution. Naturally, for sou-sous to work effectively, there needs to be a code of conduct, trust, and a collective understanding of the objective of the community.

Sou-sous are largely about building group economic power within Black communities through micro-financing. This is especially important considering access to financial and savings institutions is sometimes limited for Black Americans.

A History of Disparities

A 2021 survey revealed that Black households ranked high among those without bank accounts, stating reasons such as a lack of trust in banks and not having enough money to meet minimum balance requirements. Research by the Consumer Federation of America also reported that many Black Americans worry about their financial futures with less than half of Black households having a savings account at a bank or credit union. Many with an account said they were not saving enough for emergency expenditures.

Historically, Black families have also been denied, by law, the opportunity to establish and accrue generational wealth. According to research, the net wealth of a typical Black family in America is around one-tenth that of a white family with data showing that little progress has been made to reduce income and wealth inequalities between Black and white households over the past 70 years. Statistics further reveal that access to funds for individuals and entrepreneurs is uneven based on race.

This disparity can be traced back through the Transatlantic slave trade when enslaved people spent hundreds of years creating wealth for their white owners. Following the abolition of slavery and the introduction of Jim Crow laws, there were the broken promises of "40 acres and a mule" that directly impacted thousands of Black families and snowballed into centuries of inequality. Discriminatory lending practices and redlining further contributed to the racial wealth gap and built a lack of trust in banks and government organizations.

“The experience of racial capitalism, violence, and business exclusion is not new for Black people and it’s very much a part of everyday living across the Americas,” emphasizes Dr. Hossein. Instead, susus offer an alternative traditional way to handle finances outside of the control and policing of banks.

“Members in a susu system are able to build wealth, rotate savings among each other. Women and men who use these systems, take the time to save, make personal sacrifices to help one another. So they use the funds they receive in turn as a blessing, to buy inventory for their business, pay school fees, purchase appliances, pay off bills and to attend to life cycle needs,” she explains.

A Modern Savings Tool

Denise Bernard, originally from Grenada, uses her sou-sou, which she calls padner, to send money to her family back home. “Without padner, I wouldn’t be able to save as frequently. It’s easy to forget to put money away every week or every month so the sou-sou forces me to stay on top of my financial goals and stick with it.”

“I get a lump sum and usually I send the money back home to help family. That money makes a world of difference. I know people who send the money back home to build houses or to do home improvements back in Grenada, so the money helps the community out there,” she explains. “Some rounds are bigger with people who want to save more aggressively so they put in $200 per month. Once it’s over you can start again if you want or you can stop. I’ve done a few rounds,” Denise says.

“My dad introduced us to this method of saving when we were still young. He always said it was integral to survival because he didn’t have faith in the banking system. It helped him acquire things for our family without the excessive bank fees,” she explains. She mentions that her adult son is also part of a sou-sou and he is putting the money towards a downpayment for a property for himself and his long-term girlfriend.

Despite sou-sous being an informal approach, they can be formalized to help aid members with issues such as credit. In Harlem, Reverend Dr. Charles Butler, VP of Equitable Development at Harlem Congregations for Community Improvement, started facilitating sou-sous in 2016 and uses them to report to credit bureaus. This has allowed members of the group to not only save but also increase their credit scores.

Having a good line of credit is essential when it comes to applying for mortgages, other loans, and credit cards, so Reverend Butler’s sou-sous have been a lifeline in regularizing the saving process while giving members tangible benefits that contribute to their financial liberation.

For Black people, it’s sometimes difficult to build wealth without community ownership and collective thinking. When working to reach a financial goal or improve financial habits, doing it from a communal perspective can have a positive impact. Looking at sou-sou savings clubs, traditionally run informally by aunties and grandmas, as an example of building an endowment fund and pursuing economic mobility could be the key.

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