In so many countries across the globe, it is natural to see small contributory savings schemes. In countries like Ghana, Sierra Leone, Gambia, and Nigeria, this saving scheme is common amongst market women, labourers and other low-income earners who contribute daily as a group.
Esusu is a traditional form of cooperative in African societies whereby groups of individuals contribute to informal savings and credit associations for their mutual benefit. It is popularly known as Ajo, Adaji, Nago, Yesye, and Susu in some parts of Africa is a form of savings where you pool cash periodically with other users whereby individuals take turns to receive a large chunk of their savings.
For Esusu to be effective, there are principles that drive the system like trust and pooling. Trust refers to the amount of comfort and cooperation that exists among members of the group, as the success of the Esusu arrangement heavily depends on trust. Every member must believe that others will contribute as at when due.
Esusu gives some form of financial responsibility. Unlike commercial banks where one can easily withdraw funds at any given time, users have to take turns before they can have access to their money.
There are numerous problems associated with traditional Esusu, ranging from defaulting to small group size. It is easy to destabilize the payment structure when one defaults contribution as their traditional Esusu method is not associated with a regulatory body.
Furthermore, traditional Esusu does not give room for a large number of members, only members of similar interest are allowed to join the group which restricts the numbers to a maximum of twelve members.
Xend Finance has seen the gaps associated with the traditional Esusu model and has devised a means to curb defaulting from other members. Each capital contribution from members is locked within a period of time and can only be withdrawn when others have received their payouts.
With the advent of blockchain, the problem of having a small group size on Esusu is eliminated as blockchain gives unlimited access for users to join. Xend Finance also gives room for flexible Esusu cycle payout plans.
Moreso, Xend Finance offers decentralized insurance that guards against any form of asset loss and ensures that whilst members contribute, their money remains firm as funds are protected from currency volatility.
For more information on Esusu, Visit https://bsc.xend.finance/esusu