“I can’t believe this is happening to me! Zuri panicked as she shook her head and stared at her account balance. It was the middle of the month and she had a little over eighty thousand (Naira) left in her bank. To be fair, this would seem like a lot to some, but her expenses told a different story. This balance would barely make a dent in the bills she had piled up, and she wasn’t expecting any new funds ‘til the end of the month. Even then, she wouldn’t be able to cover the bills that has just arrived.”
In the very first chapter of The Smart Money Woman, this is how we are introduced to Zuri Goubadia, the protagonist of The Smart Money Book series, who finds herself in a position most women (African to millennial) know all too well, living from paycheck to paycheck with a middle-class lifestyle. Set in the hustle and bustle of Lagos, Nigeria, the book follows Zuri as she tackles debt, building her wealth, her career and relationships. She is joined on this journey by her friends Tami, Ladun, Adesuwa and Lara whose different circumstances and relationship with money adds to the texture of the multi-dimensional representation and complexity of the black woman (across the Diaspora and continent) in dealing with life’s many money ups and downs.
The author, Arese Ugwu is a high-powered entrepreneur in wealth management, executive producer and the voice behind The Smart Money Tribe podcast. She credits much of her success the many years in corporate Nigeria, being educated across Africa, Europe and Asia, and her own financial freedom journey.
I met Arese in 2019 at one of the events for the World Economic Forum on Africa in Cape Town, South Africa, and since then I've consumed and engaged with her products (from the books to the interviews) as she communicates financial management with a rich finesses.
Throughout the book series, Arese employs a principle of communicating financial wellness and wealth creation effortlessly through the circumstances of Zuri and her tribe, coupled with Smart Money Lessons and exercises that are practical enough even for the non-financial reader who is flirting with the idea of investing and financial freedom.
In the first book, The Smart Money Woman, where we first meet Zuri who finds herself in an insurmountable amount of debt, we are ushered into her state of wellbeing as she navigates her fears and beliefs about money that have led her to only a few thousand Nairas. Through the lived experiences of her shared relationships, the book does justice to unloading concepts like financial abuse, intrapreneurship, emergency funds, the power of networking and understanding the roots of your money language.
The evolution of Zuri, Tami, Ladun, Adesuwa and Lara’s relationship unfolds in The Smart Money Tribe, as Arese provides the readers with the Guide to Making Bank through the main theme of the book of group economics. From setting financial boundaries with family, to the transition of a lifestyle adjustment and raising capital for your business to setting a framework for group savings and investment consortiums, the second book of the series expands the concept of what a Smart Money Woman is and how her network influences her networth.
“Intrapreneurship is the implementation of start-up practices in large corporations to produce valued innovation. Those kinds of workers are value-driven, adopt critical thinking methodologies and use innovation to solve problems within the business.” – Smart Money Lesson, Intrapreneurship: Chapter 4, The Smart Money Tribe
How do all of these converge to bring you best-selling books that have impacted women across the continent to invest and build their wealth, and fall in love with these five fictional characters who have now been turned into a TV series? You’ll have to read the many chapters to find out.
Conversations about money for me have always been anxiety inducing, unless it was about spending it. As I’m going through my own Zuri (with a bit of Lara and Tami) financial journey of wealth creation through Vuyolwethu as a Service and InnovTel, all while in a wahala of a global pandemic, going into the new year with these two books that I re-read from December January to 2021 was the exact guide and affirmation that I needed.
The Smart Money Woman and The Smart Money Tribe are the books you need if you are ready to start making the necessary steps to understand the financial situation of your life, and take responsibility of the relationship that you have with money, as well the language and mindset that you carry about money into your relationships across the many facets of your life. And, with the Yoruba and pidgin spoken in the books, I’m positive that my next trip to Nigeria will be filled with more jollof and spicy rice, and a better understanding of the language
A few Sunday afternoons ago, a friend shared an article written by a thought leader and known angel investor on the continent on the momentum that angel investing has been gathering on the African continent, and his hopes for the ecosystem in the near and far future. Once we’d both had time time to unpack the read, the conversation then triggered into the origin of this kind of investing and one of the major underlying themes of financial inclusion – collaboration, and in essence group economics. In Africa, the idea of group economics may be unfamiliar by English terminology, but the practice of accruing investments to enable financial inclusion is no foreign concept.
What is Group Economics?
Group Economics is a concept that explains how individuals engaging in economic and financial activities yield better value for their money at the expense of lesser resources in savings by sharing the cost. An example of this would be through carpooling or a lift club and what Somali informal shop traders in South Africa do to grow their consumer base (and more businesses) in townships by buying their stock in bulk for other shop owners in the network. In true Africa-is-not-a-country style, different African countries practice similar components of group economics but under different names and models. In Ethiopia it is known as Iqub, while in Kenya it’s denoted as Chamas and Village Savings and Loan Associations (VSLAs) in Ghana. In this article, we’re going to explore what is called Vicobas in Tanzania and Stokvels in South Africa, informal savings clubs and how they are modelling financial inclusion respectively.
Banking on Stokvels in South Africa
According to the National Stokvel Association of South Africa (NASASA) there are more than 11 million stokvel members and the market is worth close to R50 billion (US$ 3.57 million) with over 820,000 stokvels currently in the country. In a recent study conducted by Nedbank, the most popular types of stokvels are savings, grocery and burial societies, with only 5% of stokvels focused on investment savings and 41% having bank accounts. While the profile of stokvels has always been middle-aged black women from low-income earning backgrounds convening and saving to buy groceries in December, the landscape is gradually introducing younger and middle class audiences who are using the model to generate wealth through means of property, investment and travel stokvels.
It’s not only banks that are wanting a piece of this inclusion pie, but so are financial startups like Stokfella who are bringing in a data and financial management piece to the puzzle. The platform is a management tool that enables members to facilitate their payments and claims, and grow their savings through investment channels, also enabling safety and transparency with all the members of the society. With over 9000 registered users who personally registered or were registered by stokvel executives, this application is an example of how the sector is unhurriedly being optimized both in revenue and the level of sophistication in formalising it.
Venture Capital with Impact through Vicobas in Tanzania
With a much more elevated and flexible approach from stokvels, vicobas carry out the mandate of empowerment through a model of micro-financing with economic, socio-economic and environment impact at the backend of it. Coined and conceptualised in September of 2002 by major organizations Social and Economic Development Initiatives of Tanzania (SEDIT), CARE International and World Climate Research Programme (WCRP), VICOBA is an acronym for Village Community Banks.
So, how does the model work and how is it different from stokvels? And, how are the societies sustainable investment opportunities for the vicoba members and the wider communities at large?
It begins with members forming five unit groups and each of these groups and then joining each other to make a vicoba group of 30 members. Once the rules and regulations of the group have been set and amount of resources to subscribe is agreed upon, the members contribute their savings (shares) and social protection and then begin what can be a year long training and follow up cycle with financial institutions. After the financial education from a field trainer is completed, the vicoba members can start to support their own startup enterprises with each loan is then returned to the group basket account with added value.
The premise of the vicoba model is to stimulate low-income earning citizens by equipping them with the tools and finances to develop and manage income generating activities and catalyze developmental initiatives much like the Pastoral Women’s Council (PWC) through their economic empowerment programmes.
Investments Accrue when Sustainability is Optimized
Much like PWC, the heart of the group savings model was aimed at women enabling themselves to participate in the economy actively due to the systematic (and still very nimble) patriarchal society. Group economics has licensed gender and socio-economic empowerment to greater access to education and general participation from citizens otherwise not permitted because of their economic standings. And, don’t get me wrong, not all vicobas or Stokvels work out or are rosy, in fact, most of these savings groups fail at the stage of infancy due to lack of accountability, late payments, theft and lack of transparency within the members. However, the optimist and intrapreneur in me believes in these financial models of inclusion and their opportunity at optimization of exponential empowerment to accrue more investment, and to create more impact.
I truly believe that the future of financing businesses and impacting communities lies in the power of group economics, and next month, I’ll be unpacking this ideology in “Group Economics in Africa: Part 2, Impact Investing is no foreign African Concept”. Whether you’re a startup, a technology or financial expert or a citizen with money and an idea or a dream, this is definitely an idea worth betting on.
Do you belong to any savings and/or investment groups? If so, what do you and your members save up for? Let me know in the comments section, I’d love to hear from you!