What is Sou Sou or SuSu money savings? Sou Sou or SuSu money pools, whichever way you prefer to call it, is quite popular in the African and Carribean cultures and it’s the process of formulating a group of individuals usually with someone in charge to control the pool and the participants who are willing to pull in funds on a consistent basis (weekly, bi-weekly, monthly and etc) together and formulate what the participants call to be a form of savings via their Sou Sou aka SuSu Money Savings Club.
Who’s it for? And what’s the purpose?
In my Haitian culture, I’ve watched my parents, family members, church members participate in this type of savings club which I never really thought was an actual thing that’s known to many cultures. In creole, they call it “reso,” “eso,” or “kob sol” and it was not until I was working with my clients on a real estate transaction that they had to tell the underwriters that these funds came from what they have known it to be which is “sol” money.
After much research in our ability to explain to the underwriters what this type of savings club is to be, we’ve found out that it’s actually done in many cultures and mortgage underwriters will actually allow you to use your “sou sou” savings funds to purchase a home.
How does it work?
Let’s say there’s a group of 26 individuals who would like to start this and the basis is that they will each contribute $200 every two weeks. This scenario would take a duration of a complete year to complete but every two weeks, someone in the pull will cash out and every $200 that is collected from each individual will sum up together to equal $5200 all together. The person in charge will be responsible to collect and disburse the funds to the appropriate person. The roster will be set from the beginning of the event and everyone will know which hand aka which week they’ll be cashing out beforehand.
How is it determined who gets cashed out every two weeks?
The calendar is set from the beginning and it’s a first come, first go basis. Each participant will tell the person in charge which hand they’d like to have. It’s always very interesting to me to see that some people would like to cash out at the very end, some prefer right in the middle and some would like to cash out from the very beginning and hold the responsibility of paying it back bi-weekly. Getting your hand from the very beginning, in my opinion, is the best way to get an interest free loan and bring less risk to you.
The Pros & Cons:
Pros: The participants in these savings clubs tend to feel that it would be hard for them to save consistently and this type of savings club will give them a sense of responsibility that they must carry out.
Cons: Now there isn’t anything that guarantees that everyone in the pool will come through consistently or be held responsible if they don’t but from my experience, everyone ALWAYS comes through. There’s no credit check to join, there’s no credit report to review and it’s all PURE TRUST in each individual within the group that they will make their guaranteed contribution on the basis that is set.
