Report – Fringe Banking in Canada: A Study of Rotating Savings and Credit Associations (ROSCAs) in Toronto’s Inner Suburbs By Caroline Shenaz Hossein [York University].
❝ROSCAs have been incubating within the Canadian diaspora for the past 70 years as a way to counteract the business exclusion. For the social economy in Canada to be reflective of society, the research and theories that drive the sector must reflect a cultural awareness. Rotating savings and credit associations (ROSCAs) are regarded as a time-honoured tradition practiced by many people around the world. African Canadians value ROSCAs because of how they have helped people adjust to Canadian life.
ROSCAS are at the very core of what we know as the solidarity social economy — the citizens sector. They are self-managed voluntary co-ops used around the world, and they are embedded in civil society. These cultural names for systems of mutual aid and collectivity — are known by academics as Rotating Savings and Credit Associations, or ROSCAs.
ROSCAs are usually described in a local vernacular — Somali Ayuuto, Jamaican Partner, Indian Chit, Haitian Sol, Chinese Hui, Equub for Eritreans and Ethiopians and Tandas for people in Latin America. Or as Ajo, Osusu, Esusu, Sandooq, Chit or Arisan. These cultural names for systems of mutual aid and collectivity — are known by academics as Rotating Savings and Credit Associations, or ROSCAs.
ROSCAs are hidden forms of co-operatives that Black and racialized people practise all over the world, including in Canada and United States.❞
— Professor Caroline Shenaz Hossein
BWPW Co-op ROSCA+ is rooted in Black Feminist and Womanist theory, and on the principle of Sisterhood Solidarity Economy. It draws upon “Esusu” – the indigenous and communal means of Financial inclusion, agency and empowerment for women in many parts of rural and urban Africa. With the adoption of technology, accessibility to mobile phones, and growth of fintech firms and applications, the traditional “Esusu” model is being revamped by a new generation in Africa to factor in sustainability, shared prosperity and purpose – This tweaked model has clear investment objectives, group investment component, return on investment, and a longer-term horizon.
BWPW Co-op ROSCA+ is uniquely adapted to combine a contributory savings component and a group investment program using pooled funds.
This means that rather than members taking turns to redeem the contributions each month, the funds are pooled and channeled towards vetted business opportunities owned by members, or other opportunities in the Agrobusiness and Food value chain, that are pitched by members – both in Canada and in the global South (in Africa and the Caribbean), and/or towards a portfolio of Stocks, ETFs, Real Estate, Start ups etc.
After the members study different investment opportunities, the group decides to buy or sell based on the analysis and recommendations of a portfolio manager/advisor, and on a majority vote of the members. BWPW Co-op is a worker cooperative, hence the principle one member, one vote is upheld.
Each member is eligible to borrow against a set percentage of the pooled funds in times of proven emergencies, based on certain terms and conditions, as agreed by the Board of Directors and the Cooperative Membership. BWPW Co-op ROSCA+ leverages on economies of scale, empowers members to practice delayed gratification, and unite on a bigger goal and vision.
BWPW Co-op ROSCA+ adheres to the instrumentality and subjugation of capital, i.e. that capital should work for people (Mondragon cooperative principle).
Members are able to redeem their capital contributed and/or the distributions from their investments on a semi-annual basis (June 30th and December 31st).
BWPW Co-op ROSCA+ is geared towards social finance and impact investing. The criteria for choosing investment opportunities are weighted towards Black-women owned enterprises that have wider community impact and address institutional barriers. Examples of impact areas: food sovereignty, ecology and environment, health, education, housing, period poverty, affordable housing, WASH, STEAM, human rights and security.
BWPW Co-op ROSCA+ is a proven pathway for building startup funds, working capital and investment resources, and for ensuring financial empowerment, agency and autonomy. This is particularly true for many African-Canadian women and racialized demographics that are often excluded from the formal and institutionalized cooperative movement in Canada.
An Example of a ROSCA+ Model – #SisterhoodSolidarity | Power in Unity: A Kenyan Women Cooperative Pooled Their “Esusu” Contributions to Build a 5-Storey Apartment. The women raised $1 million to complete a commercial 102-room apartment through their daily contributions which were as little as $0.1 per person, in some instances.
Habits as Building Blocks
BWPW Co-op ROSCA+ builds self-esteem of its members and deepens a culture of trust, delayed gratification, discipline and healthy saving/investment habits.
It creates a sense of belonging, fellowship, and amplifies the power of community and sisterhood solidarity.
Alone, We Can Go Fast. Together, We Can Go Farther
It enhances access to shared resources, investment opportunities, and leverages the power of compounding and time-value of money.
Empathy-driven & People-centric
BWPW Co-op ROSCA+ is flexible and adapts to the needs of members in their different life cycles, and upholds that capital should work for people.
A Documentary about ROSCAs, Cooperatives and Mutual Aid among Black Canadian Women in Toronto, Canada. Director, Esery Mondesir.
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