Susu

This article examines Stokvels (South Africa), Susu (Ghana), and Mukando (Zimbabwe) as forms of Rotating Savings and Credit Associations (ROSCAs) that have long provided financial resilience in African communities. Far more than informal savings clubs, these associations embody the philosophy of Ubuntu, emphasizing reciprocity, solidarity, and collective vitality. Historically rooted in women’s cooperatives, they have supported farming, education, health care, social obligations, and small-scale entrepreneurship, while also strengthening collective bargaining power and food security. Their adaptability is evident in the wide variety of stokvels in South Africa and in the integration of susu collectors with formal banking in Ghana, bridging informal and formal economies. By pooling risks and resources, these groups function as community safety nets that empower women, build resilience, and sustain livelihoods. As they expand and interact with financial institutions, questions arise about how to preserve their community-driven ethos while scaling their transformative potential.

Community-Based Finance in African Societies Across Africa, communities have long relied on traditional financial systems known as Rotating Savings and Credit Associations, or ROSCAs. These are also know as Stokvels in South Africa, Susu in Ghana, or Mukando in Zimbabwe. There are more than just savings clubs; they are community-based systems deeply rooted in African traditions, particularly among women, and they function on a powerful principle of collective cooperation called Ubuntu. The term ‘ubuntu’ etymologically breaks down into word fragments “Ubu” this signifies community, while “ntu” signifies vitality (Ngangah, 2019). Together, Ubuntu means “community vitality.” Sometimes translated “my community is my immunity” It is often summarized by the famous aphorism “I am because we are.”(Mbiti, 1990). The way it works is that members make regular contributions into a common fund, which is then distributed to members in turn, either through a rotating payout, a loan, or another agreed-upon method. Even though the names differ from region to region, the core idea remains the same: people coming together to create financial resilience, empowerment, and solidarity. Origins and philosophy This is especially true for the Susu in Ghana, which has been historically widespread in women’s cooperatives. The members themselves collectively decide how the group is run how much to contribute, how to grant loans, and how to distribute the money. These funds have been a historical lifeline, used for everything from farming inputs and school fees to covering health expenses and providing working capital for small traders. They also play a crucial role in helping people meet social obligations like funerals and weddings and provide a safety net for emergency needs. Essentially, these associations provided critical financial access for the unbanked long before formal banks ever reached rural areas, creating a grassroots solution to financial exclusion. In Zimbabwe, for example, Mukando has been powerfully used by women's cooperatives and small business initiatives as a tool for empowerment. It is especially prevalent among domestic workers, who are predominantly women, and has played a key role in reducing food insecurity within their households. This is because payouts aren't always just cash; they can also be in the form of groceries or vouchers for farming inputs, directly addressing essential needs. The way it works is that members make regular contributions into a common fund, which is then distributed to members in turn. This act of pooling funds does more than just create a savings pot; it significantly increases the group's collective bargaining power. Women's cooperatives participating in these schemes can negotiate much better prices with corporations for bulk purchases of goods or farming supplies, which directly increases their financial capacity and reach. Furthermore, members can borrow from the fund to pay for pressing needs like their children's school fees or unexpected medical bills, providing a crucial safety net. Even though the names differ from region to region, the core idea remains the same: people coming together to create financial resilience, empowerment, and solidarity. Meanwhile, in South Africa, Stokvels show just how adaptable this model can be. Research points to at least eight major types, ranging from basic savings groups and burial societies to investment stokvels, grocery clubs, and even groups specifically for funding lobola (bride price) or buying property. This incredible variety shows how these groups address both immediate cultural obligations and long-term economic aspirations. Their importance is so recognized that they have gained formal support through a national Stokvel Policy, acting as a vital form of social insurance in a country where savings are low and formal insurance is often out of reach for many. They are incredibly popular among teachers, nurses, police officers, farmers, and small-scale entrepreneurs, and they even continued to thrive during the Covid pandemic, providing essential emergency cover for their members. Community-Based Finance in Praxis Underpinning all of this, whether it's called Susu, Stokvel, or Mukando is the African philosophy of Ubuntu. The rules of these savings groups, both written and unwritten, reflect this worldview perfectly. Membership is built on trust, reciprocity, and mutual accountability. In practice, these groups become sites of co-creation and shared knowledge, where managing money is completely intertwined with cultural values like fairness, care, and resilience. A typical group might have 10 to 50 people, often women from the same market or neighborhood. Contributions are usually a fixed amount made daily, weekly, or monthly, managed either by a trusted collector or by the group jointly. The payout rotates so that each member gets a turn to receive a large lump sum, which is far more than they could save on their own. Over the last twenty years, these traditional practices have started to integrate with the formal financial sector. In countries like Ghana, Kenya, and Nigeria, Susu collectors now often partner with banks, depositing contributions into formal accounts. This allows members to build a financial history and access credit while still keeping the trust-based flexibility of the traditional system. Some of these groups have even grown into full community banks, effectively bridging the informal and formal economies. In Ghana alone, millions of people participate in Susu schemes, supported by thousands of registered collectors. Studies have shown the significant impact these groups have on women’s economic empowerment, entrepreneurship, and overall household resilience. By pooling risks and resources, they create community safety nets that remain strong even during economic crises or banking failures. We're now seeing property stokvels and investment groups in South Africa using technology and strategic partnerships to expand their impact further, venturing into real estate and equity markets.

Challenges and Opportunities

Conclusion Ultimately, Stokvels, Susu, and Mukando represent much more than financial mechanisms; they are commons-based alternatives to mainstream banking. They are grounded in Ubuntu and embody community vitality, reciprocity, and resilience. But as they evolve and become more integrated into formal banking systems, there is a concern that their community-based ethos could be diluted, with decision-making power shifting away from members and toward institutions. This could potentially undermine the very principles of trust and collective vitality they were built on. The future of these systems is therefore a point of discussion. However, because they are so deeply rooted in Ubuntu and collective determination and because they are practices passed down through generations, where children see their mothers, aunts, and grandmothers participating they continue to be a powerful force for co-creating aspirations and shaping the futures of their communities.

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