During the week, while completing payments for the month on our Thrift group, someone asked what we’re doing differently and how we have been able to coordinate a Thrift group virtually for over 4 years.

According to him “Just a general observation, will it be okay if I ask us all how we have been doing this without defaulting? There are so many stories about thrift/money generally that touch out there. Can we create a template of how this has worked all these years and share it with others, perhaps it could go a long way to help others trying to set up things like this?”

I mentioned the Thrift group in passing in my last post, if you missed it, please click here to read.

I’m honoring that request with this post by documenting all the things we have done and some of my personal experiences while coordinating the groups (Yes, we have grown to multiple groups).

Let me start by making a few points before I go to talk about some of the processes we put in place.

1. Intention – The idea of starting a Thrift group came off the back of a personal need. I was struggling to save money so I needed that extra push.
I didn’t set out to directly profit from having a group or to do it as a means of extra income. No member of this group has had to pay anything to join or to contribute.
This has helped in deciding who comes on board and how to manage those already on board.

When we asked some of the members what they have been able to do with their contributions, someone said “For me; Rent!
Office Rent.
Home Rent.”.

Another person said “House rent,
School fees,
Medical expenses,
Car…part payment”.

2. When I figured that having a Thrift group was the solution to my inability to save, I didn’t reach out to random friends, family, or strangers, I reached out to a group of associates turned friends who we have been in a business virtual environment together since 2015.
We’ve had over 2 years of interactions together, so it was easy to tell those who had stability and were responsible.
Interestingly, the Thrift group is only one of the many things that have come out of this small group, many have gone on to do business with each other while expanding their network.

3. Everything we have done and achieved in the last 4+ years has been done virtually.
Many of the members have never seen each other before, and some have only met just once.

I’d like to think that we have been very lucky with the people we have, but it only goes to show that it’s possible and doable. Money is a function of trust, in this case, trust increases with the members’ experience, the more contribution cycles completed, the more trust and confidence they have in the system. If I, as the coordinator of the groups, had been unable to show the capacity to be trusted with money, then it wouldn’t have worked at all.

Now let’s take a look at some of the components of the structure we have worked with:

1. Onboarding procedure: At the inception, we asked those who were interested to fill out a form. That form collected BVN, phone number, and house address, amongst other things. What we have done since then is to onboard new people strictly by referral. For any new person interested in joining, he/she has to be recommended by someone who is already on board, and that recommendation means that if the new person defaults, whoever gave the recommendation will be held responsible.

2. Transparency – Every inflow and outflow is acknowledged in the group for all to see. There is nothing hidden about what each person is contributing or when they make their contributions. Everyone sees and knows it. Schedule updates, changes, and all related activities are publicly announced to the group, so at each point, all group members are aware of what’s going on.

3. Keeping it a closed group – One of the most important things that we have done is not to allow everyone into the fold. By everyone, I mean we don’t assume someone will be responsible with money because he/she is your friend or family member then bring them in.

There are red flags to watch out for and I’ll discuss them below:

A. Those who request to collect first/early – One of my policies is to never agree to this request, regardless of who is making the request. These kinds of people are natural debtors, who are hoping to get first/early then use part of the money gotten to offset some of the months then hope for the best with the remaining months. They’re bound to break the group.

I’ll explain this further when I talk about scheduling.

B. Those joining with plenty of problems – As I’ve said, the Thrift group we set up is for those willing to save money. Motive is very important in joining these types of things.
When someone approaches and is desperate to join because they hope that joining will help them solve a big financial problem urgently, I usually turn them down, I consider it a red flag.
What a Thrift group does for you is to help you put money aside to meet your responsibilities, it’s meant to help you plan.
If you’re looking for urgent solutions, maybe you should be thinking of a loan that can help you spread repayment over some months.

C. Those who don’t have a stable means of income – By this, I mean those who are unsure about having what is required to contribute per month.
If you say you’re not sure you will have the money, it’s of no use putting yourself through such mental stress.

4. A schedule that’s not dependent on luck – It has never made sense to me that the schedule of a Thrift group should be based on luck. That people have to pick random numbers to determine how they contribute seems too unpredictable to me. I also think it’s unfair to those who are usually out of luck with things like that.

So what I thought was a better way to make it more predictable and to show others that their efforts count was to create a system that runs like an escalator.
The person who takes first in this cycle takes last in the next cycle unless a new person joins the group. When a new person joins the group, he/she starts from the back and can grow after each cycle.

This has helped in cutting out problematic people and we’re usually left with those who understand the essence of joining the group. Making the schedule more predictable also makes members rest and not worry about them being overlooked.

5. Remaining flexible, yet rigid – We have a final day for all contributions to come in. It’s the same date each month and every member is aware of it. That doesn’t change. If a member is having a challenge that could stretch his/her contributions beyond this date, the ground rule is to reach out and sort out the issue as quickly as possible. We have also made it easy by encouraging members to contribute ahead of the deadline day, so members who have their contributions any time during the month can send them in.

As much as transparency is encouraged in the group itself, a lot of unnecessary things are kept off the group. Not everyone should know, especially things that point to instability. I often help members renegotiate changes to the schedule outside the group. Sometimes, someone who has been in the group for a while and has shown commitment suddenly has an emergency, I often tell him/her to ask the person who is next in line to exchange spots with him/her. It is important to note that the final decision is in the hands of the person who owns the spot. No one’s needs are more important than that of the other members of the group.
I’ll speak further on this when I talk about treating everyone equally.

From experience, if you discuss schedule changes in the group, everyone suddenly remembers something urgent they also need to do before their slot. I remember a very committed member who reached out to me during the COVID-19 lockdown asking to make changes to his contributions. He said some of the people he was contributing on their behalf (Yes, members contribute for other people by taking multiple slots, this saves us the headache of dealing with multiple people thereby reducing the risks.) had lost their jobs and they’re unable to contribute further. From a human point of view, this made sense, so we agreed to make adjustments in certain ways that wouldn’t impact others negatively. But immediately this was announced in the group, everyone wanted a change too. So it’s important to do some dirty cleaning outside the group while ensuring that the decisions made remain fair to every member of the group.

Another member once reached out to me to say that he wouldn’t be able to meet the payment deadline. When asked why he said his organization had been owing them salaries for about two months and it did not seem like he’d receive his pay before the deadline. I told him to take a loan from his friends and family to meet up. I explained to him that since his slot was only a month away, he would be able to refund the loan and still have some of his savings. He was happy with this solution and everything worked out just fine.

Have I ever received bizarre requests, of course, yes, I usually just turn down such and move on. Not all requests can/should be granted.

6. Dealing with slip-ups – Be sure that people will test you, and it’s the people you like the most who are most likely to take advantage of you. So when someone behaves irresponsibly in any way, I am very clear in my communication to them that I won’t tolerate it this time or another time. This needs to be done one-on-one with the offender, doing it in a group will reduce the overall confidence.

Three things have happened to people who have attempted to take the group for granted. Some have voluntarily left, some politely asked to leave, and others I moved to the back of the log to start afresh, albeit respectfully. Those who have left voluntarily or involuntarily have been allowed to leave after fulfilling ALL their responsibilities to the group.

7. Everyone is important – This point cannot be overstated. You must understand that people are saving to meet needs, so don’t delay paying off the person collecting, and don’t assume that a person does not need the money because of their social status or your familiarity with them.
As I said earlier, we have a deadline date for all contributions, If for any reason there are delays, I communicate such possibilities ahead to the person and reassure them of getting their money.

No one is more important than the other person, everyone should be treated the same way. Never take any member for granted.

8. Periodically asking for people’s capacity to continue – I have made it a culture to ask after each cycle of contributions. Assuming a person is capable of continuing can lead to issues. It’s a no-shame activity as I have ensured it isn’t about who has money or who doesn’t. It is about reassessing one’s financial standing and making plans accordingly to accommodate the savings program.

These are some of the things that we have done over the years. Like I said earlier, having the right people is the most important formula. I hope this has helped a bit and that some of the strategies discussed here will help set up new savings platforms and strengthen old ones, especially in this era of technological advancement.