THE CARIBBEAN BUSINESS REPORT
New app hopes to facilitate sou sous
By Alexandra Simon
It’s money pooling the modern
way.
A new app is going to make
the traditional way of pooling
money, commonly known as
sou sou, easier. Haitian-American
economist, Sophonie Saint
Felix, is launching a digital version
of the centuries-old rotating
money loan method with
Community Banking (COBA) .
Sou sou is a term referring to
an informal money saving system,
known as such in many
Caribbean countries. In many
parts of the world, this form
of loaning and saving is the
preferred choice over banking
— as it helps people unable to
borrow from banks, access a
large amount of money.
The COBA platform is aiming
to be the more modern and
efficient option of borrowing
and saving money among trusted
people. And unlike common
practices of sou sou, COBA will
work to help its users earn
some financial gain.
“In typical sou sous, people
usually get back what they put
in, but with our method you’ll
earn interest,” said Saint Felix.
Normally, a sou sou consisting
of 10 people contributing
$100 weekly or biweekly,
could go on for two or four
months. The designated holder
of the money, also known as
the treasurer — is responsible
for keeping a record of payments
and creating a schedule
of payouts agreed upon by every
member of the pool. Therefore,
whoever is assigned the first
lump sum payout, also known
as hand, gets $1,000 the first
payout week, and subsequently
each week another member
gets theirs. This creates additional
opportunity for members
getting their hands much
later in the sou sou, according
to Saint Felix.
The function of COBA is to
reinvent this old-fashioned way
of money pooling and frame it
into a digital user interface program
that electronically manages
and processes the customary
hands-on dealings of
the system. Saint Felix says the
commission-based app, that
charges 2.5 percent per payment
will also ease the role of
the treasurer and ensures that
person gets a benefit.
“Treasurers always get paid
a few dollars by every member
just for holding the money, but
what we would do is hold the
money for them through the
site and also take on all the
technicalities of the sou sou,”
she said.
With COBA, users will be
able to join and contribute only
to a trustworthy group of members
that everyone is aware of.
The site’s algorithm ensures
that a group can be created
through someone’s contacts,
or allow each member to see
who is in the pool, according to
Saint Felix.
She said this transparency
will remove some initial hesitancy
poolers often had about
being in a pool. Because the
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app identifies who is who and
each person’s lump sum day,
this forces more responsibility
on behalf of the holder.
“Anyone can try and put
away money but when you’re in
a sou sou — people are holding
you accountable to pay every
week,” said Saint Felix. “But we
want to make this transparent
so everyone will be able to see
everybody in the group, the
schedule, and when someone is
getting their lump sum.”
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Further openness of the
app, requires that any and all
changes to a schedule must
be pre-approved by the entire
group.
This type of candidness is
important to Saint Felix. Growing
up, her family often used
the method as a means for
quick cash and continues to
participate. But with lots of
experience with pooling, she is
also familiar with the downsides
of it, which can include the late
payments of its members and
other issues. But with automatic
payments and reminders,
all the second guessing is
not a concern.
And not only will COBA be
a readily accessible place its
users can connect to and see
their pool, the platform is also
going to eventually play a role
in credit-building. Saint Felix
adds that because most members
of a sou sou are contributing
weekly, and are often part
of the pool because they cannot
take out loans — the app
will operate similarly to credit
payments and the positive
results it rewards to exemplary
credit holders.
“We want to use this to help
people build their credit and
we will report to credit bureaus
showing people making on time
payments,” said Saint Felix.
Notifying banks of potential
or prospective customers is a
viable way to close disparities
that often affect people of color
and their finances, added Saint
Felix.
“The app will allow banks to
know the people who are trustworthy
because the typical
sou sou promotes big spending
or saving, so bankers will
know that these people are
making some form of on-time
payments and can eventually
open an account with them,”
she said.
She hopes to fully launch
the app by June, and is currently
partnering with investors.
Haitian-born economist Sophonie Saint Felix is launching a
new app geared towards money pooling, better known as
sou sou, by many people of Caribbean descent. Stephanie Noel
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