The Concept of Rotating Savings

This article is written to help people struggling with the idea of savings with an institution difficult. Savings do not have to be difficult. Rotating savings is a method of informal savings and borrowing that has been used in West Africa, Caribbean and many other parts of the world for a very long time. Rotating savings is also known as Susu in some West African societies. Some Caribbean’s refer this concept of savings as ‘partner’. In this type of savings, a group of well meaning individuals/friends set aside from their budget an amount of money to be collected every week or month. For instance, if there are ten people in this group and the amount set is a $100 bi weekly, that means that every two weeks, one person will collect the pooled money or ‘pot’ of $1,000. This amount of money goes to one person; the collection is rotated until everyone gets their share; hence, the name rotating savings.
Depending on the susu/partner you join, some set up a standard amount (hand) every week, biweekly or monthly. For instance, if one hand is $100, you can decide to go two hands or three in the ‘pot’. Since this type of susu/partner or savings is not a main stream concept, if you are interested, you can start one yourself and tailor it to your group (you don’t have to have ten people to start Susu or partner). Secondly, you can ask friends and family if they know any people engaged in Susu that you may join. On the other hand, be careful of those who may abuse the system.
In participating in rotating savings, you do not have to deal with a bank which may charge you not only for keeping your money safe, but as well invest your money (this is not to say do not use the banks). Secondly, I find it particularly useful when you have a big purchase that you do not have the money for, or when you do not want to rack up further interest on your credit card. Susu or rotating savings can be used towards travel (buying ticket). Once you have budgeted for all expenses and are able to set the hundred aside, when you become the first to receive the money, it’s like a free loan with no interest. Since this is an informal way of saving and borrowing money, there has to be a level of trust and discipline amongst members. You need like minded people to participate in this savings plan. There is also a requisition for one who can keep good records.
Advantages to Rotating Savings
· Money saved does not lose value
· Monies collected can act as interest free loan
· You are more likely to save with people you know (at work, school, church, or area you will)
· You know what to expect

Disadvantages to Rotating Savings
· There is no interest accrued on the monies collected
· It may be abused by some unscrupulous person in the savings scheme