…allow each person to receive $1000 within a 10-month period. Typically, members deal in cash, so there are no banks or paperwork to deal with.
The practice is common among African and Caribbean immigrants, usually family and close friends.
In recent months, the message of practicing cooperative economics in the Black community has become a central conversation and some see sou-sous as a way of helping ourselves. Collective savings could be used toward a common goal, like buying property, blessing a Black-owned business or even starting a Black-owned business. But, should those savings still be put into a bank? Financial expert, Michael Hudson, believes so.
“I do not feel this is a sound financial way of saving,” Hudson told TheGrio. “An individual would do better to save on their own, but more importantly invest their money in vehicles that would help them reach their desired financial goal. Even if everybody is on the same page, the sou-sou program is still is a huge risk.”
Potentially, someone could stop making payments to the sou-sou once they received their payout, or stop contributing to group if they grow tired of waiting for their turn. Sou-sous also don’t allow the funds to grow interest since they aren’t in a bank.
Whether you’re considering a Blessing Loom, sou-sou or another group money venture, just keep in mind that money matters have ruined many a relationship. Make sure you’re making the right investment on all fronts.