Caribbean immigrants pool their money in susu funds, using an old tradition to start new businesses or buy a car without getting a bank loan.
When Andrew Morris decided to open Sam’s Caribbean Marketplace in West Hempstead, Nassau County, in 1993, he went to a bank to apply for a loan. But the bank would only loan him $50,000, half of what he needed to start his first business. To make up the difference, Morris turned to his local susu, an informal savings club scheme popular in the Caribbean.
Nearly 20 years later, Morris estimates he has saved almost $250,000 through susus, and, like many in Caribbean and other immigrant communities in New York, he still relies on them. “It’s just become an integral part of my business,” he said.
Susus are based on a system of group savings. A dozen or so friends and family may form a susu, agreeing to pay a fixed amount — anything from $100-$500 — into the fund each week. A ‘banker’ — a trusted member of the community — collects each person’s contribution, often called a ‘hand,’ and the members of the group take turns receiving the proceeds. So if 10 people give $100 a hand, one saver gets $1,000 the first week, another takes the pot the next week, and so on until each of the 10 savers has received $1,000.
“It allows you to accumulate money to do big ticket things,” like buy a car or make a down payment on a house, said Irwine Clare, who emigrated from Jamaica in 1978 and is now managing director of Caribbean Immigrant Services, which helps Caribbean immigrants attain U.S. citizenship. It’s “a subterranean banking facility” for Caribbean immigrants, he said.
However susus are not exclusive to the Caribbean. “Widely disparate places in the world have come up with the same thing,” said Philip Kasinitz, a professor at the City University of New York. In China, for example, farmers raise money for seed and other investments through savings clubs. Immigrants in low-wage jobs who might have trouble qualifying for a bank loan can raise needed funds by pooling their savings.
Many use the term ‘susu,’ which comes from the West African Yoruba word ‘esusu’ — meaning ‘pooling the funds.’ It was brought to the Caribbean by West African slaves in the 18th century, though some Jamaicans now call susus partners, while Haitians refer to them as mens, Dominicans prefer sociades, and Guyanans use boxes.
Morris, 52, joined his first susu in the United States, when he was 18 years old. His mother ran it, bringing the tradition with her from Jamaica. Many of the people in her fund were also first-generation immigrants: caregivers, babysitters and construction workers — “basic blue-collar folks who just wanted to put something aside” for a house or a car, said Morris.
He says he still saves in susus, nowadays to raise cash for special inventory for his Caribbean supermarket, such as the cheese he buys every Easter for traditional Jamaican cheese-and-sweetbread buns. The five-pound cans of Jamaican cheese sell for around $40 each and cost Morris almost that much to buy.
Morris’ sister, Pat Stewart, took over their mother’s position as susu banker. She currently manages funds for 45 people, for a small fee taken from each draw.
As the banker, Stewart is responsible for ensuring that the susu runs smoothly. She carefully vets all participants, talking to neighbors or colleagues to assess their reputations.
“The susu operates almost entirely on trust,” said Kasinitz. “It’s basically a way of using social capital as collateral.”
The susu only works if everyone keeps up with their payments, and it is the banker’s responsibility to make sure that happens, said Stewart. If someone takes their draw and disappears while still owing more money, “then you’re left with the bag in your hand because you have to pay,” she said. As banker, Stewart would be expected to reimburse any losses out of her own pocket.
Missing a payment is a severe breach of both social and financial obligations, said Kasinitz. Since many susus are made up of family members or close friends “you’re really running out on your nearest and dearest,” if you don’t pay, he said.
The pressure appears to keep people in line. In the 30 years Stewart has been part of susus, only one person has attempted to run away with their draw. she said
Though savings clubs are an old tradition, it was probably inevitable that they would undergo some evolution in the Internet age. Two years ago, Jamaican-born web designer Carlton Langley set up a site, OurSusu.com, to help people coordinate their savings through Internet banking. Participants already know each other before they set up their online susu, but Langley says the electronic collection of funds is more secure than using someone in the community as a banker. About 40 or 50 people use the site regularly for savings, but during periods like Christmas, the number can rise to 500, he said.
The susu “is something that’s been with me my entire life,” said Langley. His online version is “more of a 21st century take on something that’s been around for centuries.”