A Rejoinder on 'Esusu'

 Some five years ago, I had published a blogpost on the difference between the rotating saving and credit association called Esusu among the Yoruba, and Ajo the informal banking variant (you may click here if you missed it). In that post, I had hoped to provide a simple education to a global and local audience on this social practice. Also, the post was partly due to my observation that many non-traditional people in Nigeria, who may run or join such rotating saving groups, especially within formal settings do not understand which nomenclature applies to their specific practice. An encyclopaedia entry on Esusu which I co-authored has since been published by the UCL press in the Global Encyclopaedia of Informality, with an online wiki version available here.

 

In recent years, I have been increasingly drawn to study more phenomena in the informal economy of developing countries, considering how enormous the informal economy is and how considerably it contributes to the resilience of such economies. Interestingly, the lines between informal economy workers and formal economy workers are increasingly blurring, owing to what I observe in a forthcoming piece as the ‘hybrid employment status’ phenomenon.

 

In my academic journey so far, I have come to realise that it may be something worthwhile to engage in desk research about a phenomenon, but a completely life-transforming experience when one builds a practice, product or service around the same research subject. With a practice-centred approach, empirical research takes on more socio-economic meaning than the mere production of a publishable material. With a successful practice, what seemed to be a simple research endeavour can touch and change the lifestyle and perspectives of decision makers in households, firms, communities and governments.

 

At the time of writing my first research piece on Esusu, I had not practically examined the operational dynamics of Esusu group. Presently, my experience and perspective is more real to the touch since I have successfully coordinated and participated in an Esusu group. One fundamental operational thrust upon which ROSCAs like Esusu thrive is social trust. Well established groups can serve business owners as well as workers in formal sector settings.

 

In my forthcoming survey-based research, I examine why individuals may opt for informal savings associations rather than or in addition to formal banking and fintech saving-investment schemes. Even though a proliferation of fintech service providers is helping to improve financial development and inclusion in developing economies, it is pertinent to investigate why informal social practices such as Esusu or its variants may remain prevalent.

 

What do you think about the practice of Esusu ROSCAs? Please feel free to share your thoughts and comments section below. Thank you!