“In 10 days I had $3,000.” These women love to save with their friends

When Hagir Sail was faced with nearly $2,000 in unpaid traffic fines, he knew exactly how to make money.

He called six friends, each of whom pledged to contribute $500 a month to the collective savings, and as an organizer, he received the first of six monthly payments.

This is an example of a savings and credit system common in some cultural communities.

“It's one of those great things that solves a problem quickly for a lot of people,” said Sail, who is part of Calgary's Sudanese-Canadian community.

“In 10 days I had $3,000.”

It's a collective way of saving, an alternative to credit cards and payroll. At first blush, this may seem like a pyramid scheme. But it's different because it's small, everyone in the circle is known, and everyone gets paid the same.

It can be especially useful in times of uncertainty and goes by many names – ukub in Tigrinya, ayuto in Somali, and chama in Swahili.

The sail goes with the Arab, thanduk.

“Sometimes I just volunteer — aunty, by the way, I put you in this because I know you have money,” Sail said.

Explaining the informal lending system, he adds cinnamon and cardamom to his tea and plays with his 18-month-old son in the living room. He says there are 10 to 15 of these thrift clubs going on at any given time, just with friends and community members he knows.

They make an agreement and the collective nature of their community ensures that the agreement is enforced.

“We're a very communal society and your reputation in the community is everything,” Sail said. “If you break the savings circle – you take money and don't come back – you never join the savings circle again, and then the trust in the community is zero.

“Since we have no family, we are very lonely here. Your only family is your community members. Therefore, if you deviate from this belief, you have no one.”

This approach to saving came up frequently during CBC Calgary's community project with local East African communities called Knowledge Sharing.

His younger sister Sarah, who reads at Sail's kitchen table, said she will carry on the tradition as she gets older. He said he was surprised to learn one day from a Haitian-Canadian friend that it was common in his culture as well.

Some people use an experience like Sail as a real deal with a beginning and an end. But other times, people join these circles, stay in them for years, get paid a few times, and build a social network.

Barlin Mohamed has been raising money with a group of women since 1998. She is from Somalia and her group includes women from Ethiopia.

He invited CBC to get together for dinner, play Ethiopian music videos on YouTube, and catch up on each other's lives. The group started as a new refugee, trying to raise enough money to support the house.

“When I started, we put in $100. As much as we could,” said Ubah Doli, one of Mohamed's friends. “There were five of us, not much money. But if you don't have a lot, it's big. We sent you home because there was a war in my country at that time. Your family needs you.”

As the women found good jobs and settled here, they increased their monthly savings. Before long, they were paying for cars, furniture or refrigerators, and eventually helping pay off their children's student loans.

Over time, other women have joined, but they are careful about who they let in, they say.

“There are a few bad apples, bad people. When they come, they take the money and you never see it again. It happens once in a blue moon,” Doli said.

“With this group, if there's a new person and we're not sure, we don't give them the first (payment). They get the last,” said Fatuma Ali, another woman in the group. “We tell them the rules are the rules.”

They are my family. We have been family and friends for many years.– Barlin Mohamed

Mohamed said he saved it for a down payment on his house. This was partly because she had watched other women buy homes and learned from them, and it was also because she suggested a systematic way to save. Every time it was his turn to receive a payment, he divided it into a down payment.

It took him six years.

As the women in the living room around us laugh and share easily, I ask Mohamed: What's more important, the ability to save or the friendship that comes from it?

“Actually, friendship,” Mohamed said. “Because they're my family. We've been family and friends for years. We see each other through good times and bad.”

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CBC Calgary is working with members of the local East African community on a project to share knowledge between media and community members. Read more about this partnership and see other reports that have emerged from these stories.