||It has been suggested that this article be merged into Susu (informal loan club). (Discuss) Proposed since August 2017.|
A sou-sou is a West African form of rotating savings and credit association, a type of informal savings club arrangement between a small group of people. The basic principle is that each member of the group makes a standard contribution to a common fund once per time period. Then each period the total contributions are disbursed to a single member of the group. The recipient changes each period in a rotating fashion such that all the members of the group are eventually recipients.
A member who receives a distribution early on effectively receives a loan. They collect a larger sum of money early and "repay" as they make contributions going forward.
A member who receives a distribution toward the end of a rotation has effectively been "saving" their contributions leading up to the disbursal.
Traditionally the arrangement is conducted in cash and without any interest charged. The organizer of the sou-sou may be compensated for their efforts as a courtesy.
Since a sou-sou is not a written or legal contract it relies on personal trust to discourage malfeasance. For this reason it is more likely that the participants are members of the same community and know each other.