The African savings practice known as 'asue' or 'susu' is popular throughout the diaspora, and helps

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• There are many ways to save money — bank accounts, certificates of deposit, even piggy banks — but one that serves individuals and the community is called "asue" or "susu," an African savings practice that's popular throughout the diaspora.
• Groups get together to form an asue and each contribute a set amount every month. Then, each member makes their draw on a set schedule.
• Asues can be beneficial for those who aren't served well by traditional banks since the people participating in the asue may be more flexible than a financial institution.
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When it comes to saving money, bank accounts are among the first systems to come to mind. We may also think about more casual, informal systems or tools, such as piggy banks, coin jars, and the envelope method. Many do not consider community savings methods, which have the benefits of relationship development, flexibility, interest-free credit, and fewer restrictions and requirements for participants. 

There are people without bank accounts and limited options for saving money. Just as importantly, there are people whose saving practices benefit from shared commitment. For these reasons, informal community practices of saving and extending credit continue. A popular option, originated in Africa and practiced throughout the diaspora, goes by various names. In The Bahamas, where I live, it is called "asue" — several other Caribbean countries call it "susu" or "sou-sou."

What is an asue and how does it work?

An asue is a rotation of credit and savings among a defined group of people with a clear agreement that dictates the length of time it will last, the amount of money each person will contribute, regularity of the contributions, and the order of disbursement. Each contribution is a "hand" and each disbursement is a "draw." 

A group of 10 people, for example, may come together and decide to start an asue. They decide to "throw hands" of $100 every week for a 10-week period. By the end of the 10-week period, everyone will collect $1,000 once and contribute $100 10 times. One person is responsible for collecting, holding, and distributing the money. The people receiving draws earlier in the 10-week period are, effectively, receiving loans. The people receiving later in the 10-week period are saving money. No interest is earned on the money.

Trust is critical in an asue

Due to the exchange of cash among individuals, there has to be a high level of trust. This practice has existed for decades, allowing people to save and borrow money in a way that is simple and does not require excessive paperwork or other barriers that exist in formal banking systems. For those well-practiced in facilitating asue, particularly for larger sums of money, contracts may be introduced. Some asue groups also choose to compensate the facilitator for their work, but this is not embedded in the practice. 

Many people plan their purchases and investments around asue schedules. If someone is trying to save money, they would likely be happy to take the last draw. If someone needs to pay a bill or have a more urgent need for which they do not have the money, they may request an early draw. Ongoing asue groups generally accommodate these requests based on the trust they have built and the track records of the members. 

A person new to an asue group would not be allowed to get an early draw because they have not developed a relationship with its members yet. They would likely receive one of the last few draws. After participating a few times, they may be able to move their draws up. The favorable spots are usually reserved for the more regular and well-known members who have proven themselves to the facilitator and the group with timely contributions.

How an asue can benefit those who traditional banks don't serve

Asues are beneficial to people who are unbanked and people who have fallen prey to predatory banking. Some of the people in the latter group have high debt, low incomes, and arrangements that allow creditors to automatically collect payments before they can access their own salaries. 

Asue helps to keep money in the hands of individuals rather than institutions, thus allowing people to save. For example, a server with considerable debt could end up with a very small portion of their salary after deductions are made, but the tips they receive in cash can be saved. If they put that money in a bank account, it could be applied to loans and credit card bills without their knowledge, but in an asue, the money is safe with the community as savings. 

Not only does asue help people to develop a savings practice and to access interest-free loans, it also creates support systems. The person saving toward a down payment for a home can get encouragement from other participants. The person in need of a large sum of money to pay for college tuition may get an earlier draw because other members agree to move theirs further back to accommodate that person. In cases of emergencies, members may agree to switch draws.

While the system is set, the people participating may be more flexible than a financial institution. As savings are built and credit is extended, people learn about each other, form healthy financial habits, and free themselves from the clutches of predatory institutions. 

How asue has evolved — and stayed the same — over time

Some financial institutions, including commercial banks and credit unions, have added a variant of asue to their services. These are usually savings accounts with a regular deposit structure over a fixed term. Clients make regular deposits of the same amount to the account for a predetermined period and are able to withdraw their funds, as well as accrued interest, at the end of the term. It does not involve other people or include the credit option. It functions like a short-term fixed deposit, allowing people to save at a higher interest rate for periods as short as three months.

There are now schemes that use the name "asue" or "sou-sou" to trick people into joining, but they have nothing to do with this community practice. They are pyramids that encourage people to prey on others in order to make money. It is important to understand the elements of asue. Most importantly, participants only receive what they contribute over time. Asue does not promise to turn $100 into $1,000. It is a fair, honest practice that requires trust and commitment. 

Many members of the African diaspora practice it all over the world because it is simple, it is tradition, it is rooted in a culture of community, and we have seen our parents do it over and over again. There is no need to abandon the practice. Today, it is important to remain connected to our ancestors, maintain or work toward financial health, and ensure that the reputation of our practices is not sullied by thieves and scammers. 

Asue, for many of us, has given us a university education, used cars, down payments, computers, the discipline to save, and development of trust. The riches of our communities will always be its legacy.

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