Susu Contributors Risk Losing Savings Over Non-Refund Policy

ROSCA members at their weekly meeting

Contributors to Rotational Savings and Credit Associations (ROSCAs), popularly known as susu, risk losing all the money they have contributed once they stop making scheduled payments before receiving their payout. The practice has left some contributors without refunds after months of savings.

According to organizers, members who default are taken out of the group without refunds because their contributions have been paid to other contributors. Organizers explained that refunding defaulting members may be at their cost since funds have already been disbursed to other contributors. Concerns have been raised in connection to the protection of contributors who might face financial challenges along the ROSCA journey before completing a cycle

Market women recording their susu scheduled contributions in a susu booklet

Most ROSCA groups require that members contribute a fixed amount of money over a period of time and take turns to receive these monies on scheduled monthly or weekly basis. The rotation depends on every member making scheduled contributions until all participants have received their payouts. Organizers say this arrangement keeps members in check while running the savings system smoothly.

 

Doreeta, C.E.O of DEE Ventures

The Chief Executive Officer of DEE Ventures, Mrs. Doreeta Narh said all her members are aware of this policy. "Anytime a member joins, I tell them if they stop contributing along the line and they've not cashed out, I will just take them off the group and there will be no refund for them, because others have already cashed out," she said. She added that, refund is considered for defaulting members who have contributed above GH¢5,000. Even with that, the member receives only 50% of the contributed amount.

Esther, a non-refund victim

Esther Awo Tawiah a contributor, who couldn’t continue her contribution, lost all her money due to financial hardship. "When I started, I was paying regularly because I was still in school but during vacation, I wasn't getting money to pay. So, I lost all contributions I had already made, and I was taken off the group as well," she said. Esther's experience demonstrates some challenges many ROSCA contributors face.

A legal practitioner at Dame and Partners, Yaw Boampong Adu-Brempong (Esq.) advised that legal documents should be introduced in the susu scheme. "In my view, trust alone cannot be the foundation of many susu groups. There must be a clear constitution or written agreements so members and organizers may know the organization's rules, and responsibilities as well as the consequences of breaching them,” he said. Yaw Boampong Adu-Brempong (ESQ.) further explained that, for contributors to understand the mode of operations from the onset, they must ask organizers all their rules into details before applying to join.

 

ROSCAs remain an important source of savings for many Ghanaians because of its fast and accessible financial support outside the formal banking sector. However, contributors who do not complete their payment cycle risk losing months of contribution and savings due to the no refund policy. As many Ghanaians rely on the informal savings group, there are questions about whether written agreements and contracts could better protect both organizers and contributors.

 A level 300 student production by Emmanuella Naa Kwarkor Quartey