If you go to a market in Ghana you can hardly avoid meeting some of the Susu collectors. They have conducted their trade, which originates in Nigeria, for at least three centuries. The concept is not only old, it is also simple and a useful service for small traders.
In short it is a system where Susu collectors handle the cash management of micro entrepreneurs or traders – both their savings and their loans. The Susu collectors, who typically have 500 clients, collect an agreed daily amount of savings from the trader every day and deposit this on a bank account. The collector’s fee is the sum of one day’s collections every month.
There are approx. 4000 Susu collectors in Ghana collecting from 650,000 savers, 60% of whom also obtain loans through the Susus and the repayments are recalculated to a daily repayment amount which is collected along with the savings.
Traders pay a small sum to register with a Susu collector. The collector makes his daily rounds and collects a similar amount over a 31-day rolling period from each of his customers. At the end of the period, the collector pays out lump sums to the customers, while retaining one day’s payment from each customer for his services. The system runs so well that people from Senegal, Tanzania and Kenya have come to Ghana to study it, as Ghana has a record of good implementation and governance of it. But as simple as it may be it isn’t always simple or cheap to set up a Susu operation.
Samir knows all about that, he’s the CEO of a small company called Uniplux Ghana Ltd., where Susu is the key. Samir and his partner have had a tough time getting started. They saved money for five years but still needed capital to launch their business, and the banks were either shutting the door on them or demanding a very high interest rate. They’d have to pass on the high interest to their clients which wouldn’t work as they could put their clients at risk of becoming over-indebted instead of helping them grow their micro businesses.
- That’s why we came to you, says Samir, who’s hoping that MYC4′s investors can help.
Same thing with his colleague, who’s running a company called Royal Gold Investment. He had to sell some property to get going and to put in his car as collateral for a loan in a bank – and not only did he have to give it as collateral, he had to hand it over to the bank and park it there for six months.
During a meeting in Accra in February 2009, the GCSCA (Ghana Co-operative Susu Collectors’ Association) confirmed their interest in using MYC4 as one of the loan options to offer their members to access even more affordable financing. Hence MYC4 and GCSCA are working to start supplying the first SUSU collector pilot loans with Premier Resource Consulting as Provider. The project has been long underway, but the first Susu product was approved for the MYC4 platform earlier this month. The first loans are expected to be opened for bidding in the next two weeks’ time.