The Club By Many Names

Updated: May 14, 2020

I remember beautiful moments like burning my tongue after rushing to sip my sweet attayah and meeting strangers that cooked me fish on the beach. During my 4 months in Dakar, Senegal, I learned the value of time and community. As a CIEE student, I studied Development Economics while working with L’Entente Féminine, a Rotating Savings and Credit Association (ROSCA). This process, ROSCA, goes by many names including esusu, ajo, dashi, hui, ayuuto, tanda, chit funds, and savings clubs. PushBlack Finance describe the process well in this post:

For centuries, individuals have come together to create these lending circles with family and friends and help each other save. How does it work? Individuals within the club make fixed contributions of money at fixed intervals. In a rotation, each member receives the club’s total contribution. Once every member has their turn in the rotation, the cycle restarts.

The ROSCA I worked with in Dakar was unique because the organization was made up of over 200 women entrepreneurs. Every week, they meet in the President Madame Sagar Tall’s home. Women enter in staggered clumps to stuff their money in bowls and check off their names in thick notebooks that the accountants flip through with hast. While there, I heard their stories. One woman named Awa Fall, joined the club with only a few items of clothing that she would sell at the local markets, Sandaga et HLM. Then, she would use her earnings to replace her inventory. Once she joined the savings club, the cash advancement allowed her to save more and travel. She purchased garments from around the world. Some placesincluded Dubai, Gambia, and Tunisia. Her exclusive inventory took her to the top. Now, she has her own shop in her neighborhood, Liberté 5.

Awa's growth is still limited because she is trapped in the dubbed “informal market”. “Informal” is an interesting term since this sector represents 50% of employment in Senegal. Entrepreneurs working in the informal market usually do not have a form of formal identification, an exact location of their business, or a bank account. Being unbanked is not uncommon, more than half the adults on this planet do not have a bank account. Unbanked and underbanked entrepreneurs face barriers to accessing credit which can be essential to start a business or sustain a business in crises like the one we face today. Uncovering these truths and my experience with L’Entente Féminine led me to write my senior thesis on “The Impact of Microfinance Institutions and Mobile Banking on Entrepreneurship In West Africa” (find it in French here). My theoretical framework aimed to prove that Microfinance solutions especially ones with a focus on community like savings clubs increase entrepreneurship in these communities.

This translates to the Black American perspective. In my last blog, I shared a statement from Gloria Ware that explains how an increase in Black entrepreneurship will lead to economic empowerment in our communities. Additionally, I would argue that there are a lot of similarities to entrepreneurs like Awa Fall and bootstrapped business in the United States. The International Labor Organization describes the “informal market” as ease of entry, reliance on indigenous resources, family ownership, small-scale operation, and unregulated and competitive market. This is the nature of our businesses and our success is limited due to our communities being underbanked and lacking financial literacy resources. This is a translated message the President of L’Entente Feminine sent me last week:

At first, we were around 50. Today, we are around 300 members. Women's trades include sewing, fruit processing, local cereals, catering, weaving, crafts, etc. We need support for funding, but also in financial education and training in strengthening work capacity.

Due to this inequity surrounding educational resources Black communities lack generational wealth. This limits the opportunities that a family and friends round could bring for Black founders. Instead, in our communities, a young entrepreneur could be faced with the “Black Tax”. Sheena Allen, explains how a Black child that makes it to college can never save or invest because they need to support the financial needs of their family members. Sheena's mobile bank, Capway, eliminates some of these barriers by eliminating hidden fees and increasing access to money through technology. We need solutions like this! Founders Get Funds aims to close these gaps for solo-founders by creating new opportunities to learn, save, and connect. Our first savings club launched this week to help 5 beauty founders grow their businesses. For updates on applications for our next club, subscribe to our email list here!

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