The Ghana Susu: Reimagining Financial Development

cross-posted from Post-Growth Institute

In the wake of global anti-racism movements and a growing awareness of the problematic dynamics of colonial knowledge-making in international development, governments, academics and NGOs are scrambling to reposition themselves and their work in order to address systemic power imbalances. Yet, feminist economists like those at the International Association of Feminist Economics (IAFFE) have pointed out that many efforts and the scholarship largely informing the policy remain superficial, and do not go far enough in tackling the root causes of economic inequality, social and business exclusion.

In Ghana, a centuries-old financial system called Susu provides an example of effective bottom-up development that contributes meaningfully to reducing poverty and economic inequality. Men and women from various socio-economic backgrounds choose to join membership organizations, where the focus is on self-help and cooperation from within.

What’s more, the Susu system happens at a local level without top-down intervention, and it allows power and wealth to circulate among members rather than accumulate with certain individuals or organizations, as occurs in shareholder models. Guyanese economist CY Thomas in Dependence and Transformation outlined the convergence theory of how small countries, by focusing on local consumption, can counter the capitalist world system that pressures people into unequal development systems. The Ghana Susu is focused on local economies, liberates communities from foreign ‘expert-led’ development and presents the reality that people everywhere can push against the trap of dependence.

Susu is a rotating savings and credit association (ROSCA), which is a self-managed fund that is collected by members in communities, and one of the many informal collective financial institutions practiced across West Africa. In a recent study, ‘Situating the West African System of Collectivity: A Study of Susu Institutions in Ghana’s Urban Centers’, Caroline Shenaz Hossein and Samuel Kwaku Bonsu interviewed 46 Susu members in cities across Ghana. Their results reveal how, as a practice, Susu quietly challenges the dominant global system — and why it should be acknowledged as a viable approach towards decolonizing development.

A solution hiding in plain sight

Susu means “little by little” and also “to plan” in Ghana’s Twi language. Members of a Susu contribute a set amount of money regularly, which is then pooled together and given to each member in turn over a defined period. The bulk sum allows members to accumulate capital, making it easier for them to embark on business ventures, make larger purchases, pay for school fees, weddings, or funerals, and fulfill other needs. While this is the loose structure, each Susu group has its own set of rules.

Susu is not just about money, however. The purpose is pooling and sharing resources for the benefit of all members, rather than for profit. Typically, Susu systems are democratic, with the vote by the member and board members elected to make decisions on behalf of the group. What’s more, the practice is grounded, as the article’s authors note, in African theories of maintaining community life.

Research has long shown that Susu predates colonialism. But its existence outside of the dominant capital-centric market system means that the Susu has remained obscured and unacknowledged. Whole books are written on ‘alternative’ financial systems and never credit the Susu or ROSCA system at its origins of inclusive financial development. Yet it’s the informal and cooperative nature of the Susu system that make these financial systems particularly useful — while the groups are vested in structures to manage the fund, they are flexible and dynamic, and able to mobilize quickly based on the shifting needs of members through consensus. Susu banks also provide a way to make and maintain strong social ties through mutual aid and democratic decision-making.

The failure of elite commercial banking

According to the study, “the success of Susu practices in Ghana has led to immense commercial pressures to formalize them.” However, Susu members firmly refuse to be co-opted into commercial banks, and a minority of Susu cooperative banks are able to formalize for users who want that added protection. Members are well aware that Susu systems have many benefits over banks — from the strong community ties they encourage to the focus on trust, care, and wellbeing rather than individual self-interest. Susu members are driven by solidarity, not profit. They build lasting friendships and recognize a sense of purpose founded in strong social ties as a central part of living well. “Being in a Susu is about commitment to oneself and community,” write the authors. “It’s a way of life that brings joy.”

Moreover, unlike banks, Susus serve the financial needs of the vulnerable in society and help connect and protect people who are excluded from formal finance — thereby effectively addressing economic inequality. The informality of the system in this context is an advantage. For over 30 years, banks have tried to forge connections to the informal economy, but they have failed in part due to the fact that many Susu members do not meet banks’ formal policies. As one interviewee, a female business owner, explained: “Banks are playing catch up because Susu are rooted in trust and [commercial] banks have failed to create opportunities to be seen as trustworthy.” The women who use Susu are joining because of their own lived experience and are choosing economic cooperation over individualized financial arrangements.

Many informants in the study made it simple: Susu as a way of sharing is a “very African invention” — at risk of being subsumed and erased in the process of commercialization. The microfinance and so-called fintech revolution, often under the veil of white patriarchy, do not cite and reference the cooperative and member-owned institutions called Susu that are responsible for many of the innovations taking place in the financial industry. African women — in this study, Ghanaian women — are the pioneers of development finance. Participating in a Susu can therefore be seen as a political act of resistance to the homogenizing forces of global corporatized capitalism.

An antidote to top-down international development

Neoliberal capitalism imagines an economy focused on the individual pursuit of wealth and materialism, and assumes that the benefits will trickle down. In the context of development, this economic model, based on a Western yardstick, sees the processes of socioeconomic cultural change solely from a white historical perspective: the dominant economy is framed as a self-regulating system driven by individuals’ motivation to better their own condition — often at the expense of others. This mindset is based on the assumption that the world has infinite resources, and it ends up transforming self-sustaining economies into environmentally devastating systems.

Susu members, mostly women, change the narrative of modernity. Susu members move us away from understanding local development as one that is caught up in the capitalist-socialist binary, instead showing that communities can take part in not-for-profit economic activities — a sharing and commoning that can be classed as postcapitalist. Importantly, this is a type of people-focused economy that predates theories that have emerged from the white Western world.

The global economic system’s fixation on formal markets belies the existence of myriad informal markets — ”the living economy where most people interact with one another in crucial ways that support life.” In Ghana, 88 percent of the economy is classed as informal. As the authors note:

“The Susu system thrives on informality, and rather than ignoring what it has to offer, we need to recognize its nonconformist stand when it comes to development. Susu practices choose to help those excluded in business and society, offering both material and social gains.”

Despite their long history of pooling money for the benefit of the community, Susu systems are rarely, if ever, acknowledged as economic alternatives or as a development solution — even in the feminist economics and heterodox discourse.

Reimagining economics beyond profit

Susus provide proof that humans are not profit-motivated by nature, that social profitability is what many people rally around, and the idea of wellbeing and sharing trumps the value system for most humans. Member-owned and cooperative systems resist the corporatization of the economy and offer an inspiring case study for how people can — and do — lead their own development. With their roots in community economies, they provide a working alternative to the aggressive pursuit of economic rents and actively disprove the growth thesis.

What is needed more than ever before is to reimagine financial development in terms of the grassroot rotating fund systems like Susu as the starting point of what we know about inclusive economies. That Susu systems and ROSCAs continue to survive and thrive in a contemporary neoliberal context is testament to the strength of long-established indigenous approaches. The Susu’s very existence refutes capitalism’s insistence that it is the only possible business model for society. The reckoning is that wholly alternative systems exist — and have existed for a very long time in Africa and its diaspora, and we should all be crediting these financial cooperatives.

Inspired? Here’s what you can do next:

1. Read more about ROSCAs and how they are being used by racialized women in Canada to build trust and mutual aid among communities, while helping members save money and avoid the racism they often face from the conventional banking system.

2. Watch The Banker Ladies, a short film about tells the stories of Ginelle, Aisha, and Mabinty, three Black women in Toronto creating diverse financial services for their communities.

3. Read these books by Caroline Shenaz Hossein:

• Beyond Racial Capitalism: Co-Operatives in the African Diaspora

• Community Economies in the Global South: Case Studies of Rotating Savings, Credit Associations, and Economic Cooperation

• The Black Social Economy in the Americas: Exploring Diverse Community-Based Markets

• Politicized Microfinance: Money, Power, and Violence in the Black Americas