Big Banks Have New Competition: The Sou-Sou Club
/* Style Definitions */
mso-padding-alt:0in 5.4pt 0in 5.4pt;
mso-fareast-font-family:”Times New Roman”;
By J. Smith
Now this is a movement I can get behind. Marie Lumen Clersaint started a sou-sou club in Brooklyn, NY and effectively told Wall Street thanks, but no thanks, we can handle our money ourselves. A sou-sous is an informal savings club popular among Caribbean and African immigrants that requires no paperwork, no credit check, no proof of income or even a signature. Clersaint’s club is based on the honor system. A very valuable honor system.
“At any given time, Clersaint runs two sou-sous where people come together and make regular contributions to a common fund, which is then disbursed as a lump sum to one member of the group every cycle,” The Grio reports. “The payouts for her current sou-sous are $20,000 to $10,000. They have 40 and 20 members, respectively. Each member puts in $500 bi-weekly. Every two weeks one member of each sou-sou will receive their group’s entire payout, until each person gets a turn. The $20,000 sou-sou runs for 18 months, the $10,000 savings club lasts 10 months. For the person who gets the first disbursement, it’s an interest-free cash advance and for the last payee it’s a no-interest savings plan. And for those in the middle, it’s a combination of both. There are no checks or money orders involved. It’s all cash all the time.”
This is a concept that I would love to see a bigger portion of the black community latch on to. The membership intake is very selective, however, because there is little legal protection for the organizer or the payees. Clersaint must know you and trust you personally before being considered for membership because the organizer is responsible making up the difference if a member defaults on their contributions. According to The Grio, she has been organizing sou-sous for 13 years now within Brooklyn’s Haitian community and she has never once been stiffed. Missing a payment to the sou-sou would be “tantamount to defaulting on a loan and the one who dodges payment can expect to be ostracized by the rest of the community,” The Grio reports. So, since most sou-sous are made up of family and close friends, there’s incentive and immense pressure to honor the arrangement.
It is high time we as a community took charge of our finances. Not since Black Wall Street have we had strong financial institutions that both are both owned and operated within the black community. Clersaint should go around the country helping other sou-sou clubs get started.