For the uninitiated, a sou-sou is a money leading group in which participants contribute a set amount each time period and one person receives the full pot each time. Let’s say there are six people in the sou-sou and everyone puts in $100 each month. In January, Mary puts in her $100 with everyone else and gets the $600 pot. In February, Deborah puts in her share and also get the full pot. This continues until everyone has had a turn receiving the full pot.
Sou-sous have been a traditional way of communities supporting their own and maintain bonds in a new country. According to an article from Essence magazine sou-sous are common among Caribbean and African immigrant communities, although other groups are also known to practice it. The first time I heard of a sou-sou is when I started my first job out of college. A couple of coworkers had one going and asked me if I wanted to join. I barely knew these people so I politely declined. Still – this may be the anthropology major in me talk – I thought it was interesting that they created this support system at work.
While sou-sous have traditionally helped people raise large sums of cash and are a form of social support, they have a number of drawbacks. Here are some of the pros and cons.
Pros
- You can get a large amount of cash without have to save for a long time
If you need cash immediately you can be one of the first rounds. In an emergency this can be a lifesaver if you haven’t had the chance to build your emergency fund yet or if it’s not enough to meet your needs.
- Sou-sous provide an excuse for friends to connect
In the aforementioned Essence article, one participant noted that the sou-sou was an excuse to meet up and maintain connects with friends from home countries. If you’re in a neighborhood with few friends or kinfolk, sou-sous can be a great way to maintain connections.
Cons. So many cons.
- All participants must be trustworthy
Sou-sous operate on the honor system: every member is expected to contribute their share each month. However, most sou-sous are informal and I doubt if many have any written agreement that folks sign and notarize. Therefore, there’s no stopping Mary from taking the first pot and “disappearing” for the next five months or “forgetting” to put in her share.
- May not be kosher at your place of business
Creating a sou-sou at your job like my co-workers did may be a nice way to bond and help each other out, but it may be a grey area at your workplace. I later found out that my job frowns on money lending groups. You can probably see why: HR has better things to do then work out who owes who money. Work sou-sous can get especially dicey when a supervisor and subordinates are involved. Just say no.
- You don’t earn any interest
For me, this is the biggest con of sou-sous. The main reason why I didn’t join the work sou-sou (beside the fact I didn’t know them from Adam) was that I figured that I could put the same amount I would contribute to the sou-sou, invest it or put in a savings account and have the total sum plus interest. Without worrying about Mary dipping out.
While the sou-sou might be a forced savings plan since everyone else is depending on you to contribute what you promised, you can have that same accountability by setting up an automatic deduction into a savings or investment account. In this way you get to control your own pot and benefit from it compounding interest over time. If you need the money within the next year or two, I suggest keeping in a high yield savings or money market account. You can use a site like bankrate.com to search for these types of accounts.
What about you? Have you participated in a sou-sou or similar money lending group? Let us know your experience in the comments below.
I am in a sou sou where no one can run off with the money…I don’t pay in every week. A one time “gifting” to someone else netted for me in 28 days a “gift” of $4000.00 from which I had to again “gift” $500 to the person coming behind me…so I am definitely certain I could not earn that much of a return that fast even if I had invested in stocks and to try and earn interest on a savings account ….wait and wait…not in lest than a month…I may would have earned lest than 2%. No one holds the money…the gifting is electronically sent directly to banking or Cash App acct. I love our sou sou because we all rejoice when one receives their gift!!!!
Mattie, I’m glad that you’ve found a system that works for you and the other participants!
This was a good read. Thanks!
Thanks Shay!
Yes I’ve been in sou sou for years it works and I’ve added younger members of my family during the pandemic that lost jobs. It’s a shame that there is so much bad reviews on this. I’ve never had a bad experience and it can be so helpful for people who are struggling
Hello I’m about to get into one. Let’s talk
I’m a this kind of sou sou. We put in $500.00 and in 28 days we got $4000.00 we put $500.00 back in and kept $3500.00. We did it with friends and family only. We opt’d to admin our own sou sou to keep the trust. We send out weekly updates to the group. We all have one anothers contact information to remain accountable.
Hello so how many people do you have in a group?
how did you and your family get started, i just want family and friends
HOW many people in the group and does everyone get paid at one time
is there a way that the group can be closed so that it doesnt spread too far?
I’m trying to join a good program like this. Can you point me in the direction or join yours?
That’s awesome Mattie, my husband and I are apart of a Sou Sou just like you we put in $500 and we have already harvested twice so we joined a second one and this one is filled with our family and some close friends.
Hi,can you give me info about yours? I’ve been trying to find out about and join some and would love to hear about it! Thank you!!
I believe this is similar to the Friends & Family Share plan. I was told about this plan a few weeks back and decided that it wasn’t for me. It has a good business concept and will work if all those involved will work it and everyone can get paid however I question the sustainability of the business model.
What can you do if a sousou stalls?
How can I find a SouSou to participate in that is reputable?
Maddy I am in a similar group .. however, brainstorming on how to lock it to current members only and keep the rotation .. any suggestions on how and maybe the number of ppl needed to do so? My group has been amazing and gifting on time with no issues! We just want to remain small and private without needing to add ppl consistently
I love this! I would like to start one for my close family anf friends. I jist dont understand the rotation can you help me please
They have just declared it a scam in the Washington Post and anyone can be held criminally liable for requesting to be in what is defined in these sou sous as a pyramid scheme. Read the article. I just kindly backed out of one.
Carol
They were speaking of looms and wheels. Original Sou Sou’s and Share groups are legal. There has been some people creating loom and wheels that are taking people money and that is what they are talking about. Share Groups are legal just as savings clubs and christmas clubs are legal. People must learn the difference. Anything moving and say they can payout in days are suspect. The Share Groups these people are talking about in the above comments are legal gifting’s are over a period of time. I have spoken with a District Judge on the differences.
Donna does any of the clubs or communities you all are speaking of involve members inviting new people constantly? I would love to hear what the Judge said that confirms compliance with the letter of the law. How does a share group operate?
Folks have been in Sou Sou’s for MANY years, it’s NOT a scam. It’s definitely far from a pyramid, not even structured like one. We must educate one another and stop running away from our blessings.
I encourage people to do their own research. It is not ironic that the Washington Post would have an article targeted at black economics. Please read the IRS and federal laws for yourself. I am thankful that our group has individuals that actually deal with the difference in this being legitimate and that it is not a pyramid or ponzi scheme. The article did not go into in depth detail on the actual laws that make this legitimate. Nor was it surprising that the article was written by a black female working for a white newspaper. We have to educate ourselves and not take things at face value. A Sou Sou is not a board, loom, etc. It is okay when every other race, ethnicity, or nationality has been doing this except for the growth of generational wealth within the Black communities.
Liu what does make gifting communities illegal? I;m really trying to understand. Or, do you mind explaining what a legal Sou Sou is?
Can you share article cite.
It’s all about the people you choose to enter with. Pooling money together in a rotation is not a scam. I think People like any thing else choose to do this with untrustworthy folks and end up getting scammed but the sou sou in itself is not a scam. There are risks but as long as your group is upfront about them and follow the guildlines of the group you can save a great deal, before banks would lend to blacks there were sou sous wouldn’t be surprised if big banks didn’t write these articles as a deterrent.
SouSous are not a scam and I would also like to add that this was and has always been a way for people of color to grow generational wealth for decades. Whenever black people learn how to be self sufficient and learn ways to build their own wealth, they put this false narrative out there to divide and conquer. Why??? because they can’t come in and destroy them like they did before. Let’s not forget Red Summer where they massacred entire towns of black people as punishment for prospering economically – Black Wallstreet in Greenwood (the town in Tulsa, OK that was burned down), Rosewood, Fl., East St. Louis, and 20+ other cities. You have to know that those communities worked together and that is exactly what SouSous can do for each of our communities – work together to build them up. We can create revenue to purchase land, property, open businesses, etc. No pressure to join but I want you to know what they are not.
When they call it Sou Sou and have well over 500 members and one of the requirements is you bring in two additional people, constantly recruiting and they say no refunds. That’s not a legit sou sou, that is what’s being taken out of context, the folks the that are preying on others who may not understand the real nature of a sou sou
Mattie is this a group where they ask you to invite in other people? Does it involve rotating on a chart or flower diagram?
I am in the same sou sou and I feel and agree with everything you have said.
Bonjour, ton blogue est très réussi! Je te dis bravo! C’est du beau boulot! 🙂 Ruby Gabie Drus
My mom and sister have been in some sort of sou-sou for over ten years. There are some horrible stories, but their group works. I like the interest option, so I put my money in the bank, even though it takes forever to gain interest. Some of these new sou-sou are asking for admin fees in the $100s. Not for me.
What banks support Sou Sou