Isusu, a traditional savings and loans scheme boosting petty businesses in Igboland

By Anayo Okoli, Vincent Ujumadu, Chidi Nkwopara, Chimaobi Nwaiwu, Ugochukwu Alaribe, Peter Okutu, Chinedu Adonu, Ikechukwu Odu & Steve Oko

”ISUSU” (meaning small, small), a savings and loans scheme in Igboland, has been of immense benefit to petty and medium size business operators.

It has transformed some of these petty traders to big time business operators. It helps them build up capital in their businesses. It is popular in Igboland for capital formation. It is a good alternative for borrowing from financial institutions. The modalities are not too rigid.

What an interested person needs to do is to make up his mind to obey the conditions stipulated in the scheme and before long, he saves enough capital to embark on any business he desires.

Traders who want to grow their business can, instead of borrowing from financial institutions with their attendant strict conditions, start saving to raise adequate capital through Isusu. Even people who want to build houses but do not have enough money to start with, can join isusu club to enable them achieve target savings to enable them accomplish their desire.

However, Isusu scheme is principally based on trust. Those engaged in it understand the high risk involved.

Mrs. Emilia Nwosu, a petty trader in Awka said she has consistently been involved in  isusu for the past 20 years. She explained that one must know the background of the operator before committing his or her money with the person.

“When I started my petty trading business, it was very difficult for me to save as most of my profit went into housekeeping. I knew that sooner than later when my children would start school, my husband and I might find it difficult to cope with payment of school fees.

“So I joined one  isusu  club in the market and was contributing N500 daily although it was affecting us in the house as we had to reduce some of the items we were consuming. I persevered and was making the contribution religiously and at the end of every year, I would have saved enough money to pay for the children’s school fees”, Mrs. Nwosu said.

Another type of  isusu  is the one where a number of contributors decide to raise money for their members. They contribute an agreed amount monthly which is given to a member on rotational basis to enable the beneficiary to embark on whatever project he has targeted for himself. It is even on record that many wealthy individuals engage in this type of  isusu.

Mr. Obiadi Dike, a businessman narrated how he used the money he saved from isusu to build a house for his mother. “We were ten trusted friends making the contribution and the minimum each person contributed every month was N100, 000. I took two slots and luckily for me, I picked the first number during the ballot, which gave me N2 million. The amount went far in the house project and at the end of the cycle, I got another N2 million and completed the house for my mother in the village.

“If not for the  isusu, the house project would have affected my business or I might not even have contemplated building the house in the first place.”

However,  isusu  business is not always a palatable story to tell. A civil servant, Mrs. Gloria Okonkwo narrated a story of how she lost N60, 000 to an  isusu  operator. She said: “This lady was always coming to the office on the payday for my monthly contribution of N5000 which was to mature by December of the year. Before the closure of the office for the Christmas when she was supposed to pay all the contributors, she was nowhere to be found. Up till now, she has not showed up and her telephone line had since gone off.

“We traced her home only to be told that she had since relocated from Awka. It was indeed a bleak Christmas for my family and I will never get involved in  isusu  again in my life.”

For Fidelis Dim, a curtain and footman dealer based in Umuahia Abia State, isusu  has tremendously impacted the Igbo economy as it serves as one of the fastest ways to raise quick capital for low income earners. According to Dim, many middle class Igbo traders and entrepreneurs today at one time or the other, raised their initial capital through  isusu  contributions.

The Uga, Anambra State-born trader, said  isusu  helps like-minds raise soft capital which members of the group access easily either to help boost their trade or for other purposes. He said that he was actively involved in the practice but currently his wife is much deep into it.

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“I can tell you that  isusu  is nice provided you are able to identify sincere and honest people that make up members of the thrift society.It helps people especially those without god-fathers to raise quick capital. You contribute small money depending on your capacity, and when it gets to your turn to collect, you receive something bulky.

“I did it before and my wife is still in it. It helps us to solve a lot of financial needs especially during Christmas period”.

He however advised people willing to be involved in the practice to ensure they ascertain the financial strength of other members of the group to avoid a member defaulting. According to him, defaulting members negatively affect other members of the group who are yet to receive their contribution before any break in chain occurs.

“That is why members provide guarantors before receiving loans from the group so that in the event of any default the surety will be held responsible”.

Dim explained that one person may be involved in many  isusu  groups and may take loan he collects in one group to service the loan he gets in other groups, thus, defaulting in repayment.

Besides such cases of defaulting members, isusu generally, “is a very wonderful idea.
Corroborating Dim’s account, a tailor, Mr. Mba Ude from Afikpo in Ebonyi State but based in Umuahia, said he raised the capital to buy sewing machines and rent his shop through  isusu  contributions.

The Alvan Ikokwu graduate of Education/Political Science said that he trained himself in school through  isusu  contributions. He strongly recommended the scheme but cautioned that one has to be sure of the integrity and financial capacity of other members of the group to avoid some members defaulting.

“Isusu  is very good. It helps members to set goals and targets for themselves. You can target a particular project you want to execute for the year and make you contributions towards it. Once it is your turn to collect your contributions, you go and deploy it to the project immediately.

“It has helped me a lot. I started  isusu  many years ago and I credit my success story to it. I trained myself in school with  isusu  contributions. I also used it to buy machines and rent this shop. I currently belong to three different  isusu  groups. Each year I target one major project I want to execute with the contributions, and once it is my turn to collect, I execute it immediately.

“Sometimes I swap turns with other members if I have a pressing need but I usually like collecting last so I can use it for projects. So, isusu  is a nice thing but one has to be careful about the sincerity of other members. That’s why I choose the groups I belong, not just every group to avoid disappointment.”

A Mechanic who operates at the Abakaliki Mechanic Village, Mr. ThankGod Njoku said that the  isusu  scheme has helped him develop the culture of savings and prudent management of every available financial resource at his disposal.

“The contribution we do is very helpful. If there is nothing like  isusu  existing, I am not sure I can establish or expand my business. With the  isusu,  I have begun early this year, I believe that at the end of the year, I will be able to start selling some motor parts in my shop instead of depending on other people.

“The scheme helps in the expansion of businesses and helps one develop the culture of savings. With the way and manner money comes to us, if you don’t save, it will be difficult to carry out any other forms of business”, Njoku said.

For a Civil servant, Mrs. Chinwe Chukwudi, who complained about the merger salary she gets monthly, the scheme has given her the courage and financial stability to invest in other areas of business, instead of relying on her poor monthly pay.

“The salary we are paid is very merger and so  isusu  has helped us to carryout projects that ordinarily we wouldn’t have been able to do. What we do is on a monthly basis, until the end of the year.

“No matter how small you contribute, make sure it is steady and definitely you will reap from it if you are disciplined, determined and dedicated to the terms and conditions of the scheme.

“I am planning to buy a car before the end of this year and I believe that with this scheme which has helped Igbo in their businesses, my project will surely be achieved.

The reason persons don’t go into it is because, one’s earnings come gradually. Also, if those involved are not committed and faithful to the agreement governing the scheme, it could lead to the disruption of the entire process, monetary loss and sometimes chaos”.

In his contribution, a barman in Nsukka Local Government Area of Enugu State, Cajetan Agbo, said the culture of saving bit by bit has helped to start and sustain many businesses flourishing in Igboland today.

Agbo explained that many Igbo businessmen who are today, owners of big businesses started through such saving scheme. He said that it helps in controlling extravagant spending because those involved in the saving culture usually save something on a daily basis, leaving them with the cash to solve only basic needs.

“Some people spend unnecessarily because they have money at their disposal.

Different saving schemes have helped Ndigbo to build their businesses. For instance, a foodstuffs retailer who wants to go into wholesale may start saving when a particular foodstuff he is interested in is scarce. He can then use what he has saved to buy reasonable quantity of the foodstuff when it is abundant in the market. That way, he can become a wholesaler of the foodstuff.

“Many people have used the method to grow their businesses and even start businesses for their younger ones,” he explained.

But for an Onitsah based industrialist, Chief Johnson Okolo,  isusu  savings and loan scheme, is necessitated by ignorance by the operators and the people that patronize them.

“Banks are there for the people to save money but people out of ignorance patronize them and they are creating more trouble for them than solving their financial problems because 80% of the people who transact the business with them end up getting negative stories about what happened to their money.

“It is poor people that manage the thing, and when they collect the money and have one problem or the other, they use the money to solve their problems leaving the depositors to cry and complain for mismanagement of their money.”

“Sometimes when they use depositors’ money to solve one problem or the other, they are not able to repay the money because they have no means of repayment; so it is ignorance of our people that make them to patronize them. I think our people should do away with that kind of saving scheme; banks are there for them to do such savings.

“Isusu  savings and loans business is not  helping Igbo in growing their businesses, rather it impoverishes them more; after all  they do not give interest, rather they collect from your money instead of giving you interest, and the money they remove is more that the amount the banks collects. For me one needs only a small commitment to go to bank to save instead of patronizing them.

“There is more danger, more disappointments and disadvantages in  isusu  business transaction than gain or advantages. We have heard cases where the collectors and managers made away with people’s money. Have you not heard many that collected millions of naira belonging to their customers and ran out of the country, it has been happening here in Onitsha and other place?

“Some of the operators are dubious, they make up their mind from the day one that they will intentionally collect the money and dubiously embezzle it, and they enter into the business to achieve that aim, and once they get enough, they run out of the country with people’s money. Many of them have collected people’s money and travelled out of the country. 50% of them end up duping and running away with people’s money. There is a lot of risk in transacting that business. It is not helping out people in any way, and therefore should be discouraged”, Okolo said.

Isusu was and still remains a system of raising money collectively, for specified individual targets like building houses, starting small retail businesses, payment of school fees and other personal issues.

In Umuoyima village, Owerri Nchi Ise, 82-year old Dorathy Njoku, explained the practice of  isusu  thus.”In the years of yore, a few like minds, would come together and agree to make specified contributions weekly, biweekly or monthly, to help ourselves in achieving individual goals.

“Nobody knows how or when the process started in Umuoyima, Owerri. I grew up to meet the practice and I can conveniently say that it helped people a lot, particularly peasant farmers, petite traders, as well as intending house owners.

“The  isusu  practice was not limited to only cash. During the farming season for instance, a few people may decide to exchange their labour, instead of asking for payment in cash. With this, jobs are collectively done and very fast too.”

According to Madam Njoku with glee, the practice helped their parents in different ways, including the education of children. “I urge Ndigbo to keep the practice alive. It helped our forefathers and it will still help our generations yet unborn”.

A trader at the Eke Ukwu market, Chief Emma Ibeh, who deals on food ingredients, said that he survived from a saving scheme like cooperative society because he had in the group people of like minds and secondly you have to pray to God to guide your activities.

He said though it has helped him grow his business but not without some issues where some members collected money and refused to repay thereby making it difficult to achieve the purpose for which it was set up.

“This, my business was revived by the money I got from contribution group. When former Governor Rochas Okorocha, demolished Eke Ukwu market, all means of livelihood was destroyed. I was forced back to level 0. What I did was to collect money from our contribution and I used it to start afresh. I even entered into other business. So it has helped me to stand back to my feet in business.

“Not just I, a lot of people my friends, also collected money and we were happy that it did not take much time for us to come back alive if not what would I have done.”

However, Ibeh noted that “the disadvantage of it is that when you do it with the wrong people; they collect money and will not return it back such behavior kills the vision of the group and discourages members. We had to arrest one of our members for defaulting; we took him the police station and dumped him there until he signed an undertaking on how to repay us.”

A former banker, Mr. Vincent Ihesinulo, said that  isusu  has helped Igbo traders and apprentices to amass capital to promote their business.

Ihesinulo explained that the  isusu  system helps the struggling Igbo trader, apprentice and other small business operators to make daily, weekly or monthly contributions from where they can make some withdrawals to start or support their businesses.

He further explained that the contribution made by the trader or apprentice serves as a form of collateral for them when they want to make withdrawals.

The former banker further stated that the major advantage of the isusu system is that it is more convenient for the traders and apprentices who may not have chance to visit the bank to make deposits.

“Isusu system helps the Igbo trader or apprentice to amass funds for their businesses. The trader or apprentice makes daily, weekly and monthly contributions from where he may make withdrawals to support their businesses. Both the apprentices and traders have been able mass up trading capital through this means; making contributions at the agreed periods. The isusu operators and agents usually come to markets, offices and shops to collect cash contributions from the traders, apprentices and other subscribers.

“Traders and apprentices hardly have the time to visit banks to make deposits. It is more convenient for the traders and apprentices for the agents and operators of the  isusu system to visit the markets, shops and offices to collect their contribution.

“There is also minimal documentation, which makes it convenient for those who see banking as involving a lot of “grammar” and documentation.  Isusu  also helps to promote fiscal discipline among the traders, apprentices and other subscribers, as they are obliged to make the periodic contributions irrespective of sales dynamics and at the cost personal comfort. Through the  isusu  system, you can save huge sums of money to meet your business and other needs. Save for the forfeiture of a minimal percentage of the contributions,  there are no bank charges in the  isusu  system.”

However, Ihesinulo noted that there are huge risks involved in the  isusu  system, as deposit can be lost to a fraudulent agent.

“There are many disadvantages in the  isusu  system. Most apprentices and traders have lost their contributions to fraudulent  isusu  operators. Again, there is no serious agreement binding the agent  with the traders and apprentices who make contributions. Banks are known to pay interests on untouched funds in savings accounts but this is not applicable in the  isusu  system.

A welder at Mbanugo Street, Coal Camp, Enugu North local government area in Enugu state, Mr. Ifeanyi Oyiga said that  isusu  contribution helped him save money while learning welding trade.

Oyiga said that he bought his welding equipments with the first money he saved as an apprentice, adding that his first car was also bought with  isusu  money.

Expressing satisfaction with  isusu,  Oyiga also said that it helped him to reduce excess expenses to ensure that he pays daily contribution.

“Isusu is a very essential means of savings that have helped and is still helping Ndigbo to grow business. It has contributed immensely in growing capital and reducing excess expenses. An apprentice who is doing a daily contribution will not like to eat two times to make sure he saves money for contribution.

“I will use myself as an example; when I was learning welding, I was doing contribution and at the end of my one year and six months period, I save N500,000 which helped me to buy welding equipment. When I started my own business, I continued the contribution and with it, I have done a lot. I did contribution for two years to buy my first car”.

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