One of the many methods a small business owner can raise money for his firm or towards a particular project, is through a thrift contribution scheme.
This thrift, known as ‘Ajo’ in Yoruba, ‘Esusu’ in Igbo, and ‘Adashe’ in Hausa, is a contributory savings programme in which markets, businesses, and even those working in the formal economy, contribute a portion of their trading profits over a set period.
Most Nigerians, especially in the informal sector and rural areas, are involved in daily contributions known as Esusu or Ajo.
Savings plans come in two main categories which are; Personal Savings and Contributory Savings.
Personal savings is when an individual saves his money with a person who is typically the collector, who goes from store to store to collect a predetermined amount of money from various customers on a daily or weekly basis and at the end of the month, the collector gets a commission from it.
The second method, which is Contributory Savings, that basically entails a group of people from the same trade or geographic trading location coming together to set aside a predetermined amount of money so that they can distribute it to each member at a predetermined time, often without anyone collecting commission.
Aside from the fact that esusu relieves financial pressure and prevents you from having to spend all of your income on one project at once, being thrifty has other benefits, such as helping you to avoid some hidden traps set by loan sharks.
Speaking with a businessman in Computer Village, Ikeja, Lagos, who owns a firm known as C. Dot. Clothing, he said, thrift is the only way to make meaning out of the business he is doing.
To him, “I treat Ajo as my salary. After the daily sales, I take out Ajo’s money, so that at the end of the month, I can collect the money in full, and use it to either pay for the shop rent, or restock or buy other things and by that, I will not eat my capital.”
Also speaking, a mobile phone engineer, who does not want his name mentioned, stated that, many people in computer village engage in thrift contributions, and some contribute between N1,000 and N100,000 depending on their capacity or the project they are targeting.
“I have been doing Ajo for a long time, and it has helped me to remain focused. For instance, the house project I have embarked upon was possible only through my contribution, which I would not have achieved if I was not doing that.
“As it is now, I am expecting to collect my contribution in a few months to complete my house project. Also, I see this as a way of paying myself a salary because the kind of work I am into, is a daily job, and you know I will pay bills. If I am not doing it and I deposit every penny I earn in a day, it could serve as a temptation to spend it recklessly,” he pointed out.
Another beauty of this scheme, he stressed, “is that I do not have to leave my office to contribute, they are registered thrift collectors and many are here, so the advantage is many for us as businessmen.”
