I first read about these savings groups in a very cool book: Shadow Cities: A Billion Squatters, A New Urban World. Sometimes known as a merry-go-rounds or savings circles, these grassroots groups build on both the self-help and cooperative models.
Here's an example of how they can work: a group of neighbourhood women get together and they each contribute a small amount on a regular basis (say, a dollar a week) to the pot. Then at a predetermined period of time, say, each week, one woman gets the entire pot. She can use this money to pay for her kids' school, to improve her (usually self-built) home, pay off debts, to purchase materials for a small business, or whatever else she may need. The next week, the next woman in line gets the pot. And it keeps going around and around, meaning each woman can rely on a tidy sum of money a couple of times a year.
Recently, in Uganda, one of these groups, grown too large to handle the savings circle model, expanded to something resembling a community bank.
It started five years ago as Nigiina, a village group where women meet, discuss development issues, party and exchange gifts on a merry-go-round basis.
Bukesa Women Kwagalana Group has since graduated into something more serious - a village bank with 320 'shareholders'. <AllAfrica.com>
A 320-member women’s merry-go round group, (Nigiina), is in the process of transforming itself into a Savings & Credit Cooperative (SACCO).
The group started five years ago as a gift-giving group.
Every week, they would come together, deposit money or gifts in a pool and give it to a member. But as the group grew, the members had the good sense to realise their business model had limitations.
For starters, the bigger the group grew, the longer the intervals between gifting for a member. Secondly, it was only a matter of time before differences of opinion about how to employ the monies tore the group apart.
In a SACCO, there are well laid out rules and procedures for how surpluses are created and spent. <New Vision>
Yep, good thing they have us, those helpless women, those Africans, those Third-Worlders.