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Money Matters

The Njangi: An African Financial Support System

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In tough financial times when banks are failing and the systems we trusted before are no longer reliable; in times when money is scarce and financial responsibility enormous, I reflect on an age-old system of money management that is used to this day. A community-based system that has supported families through tough times, stretched meager incomes allowing parents to educate their children; giving others great opportunities to develop their lives without the total dependence on any banks or major regulatory system.

The Malians, Algerians, Moroccans and several other French-speaking African countries call it “”. Liberians and Ghanaians call it “”. In Nigeria it is known by many names but “ajoh” and “” seem to be widely used. In Cameroon “” and “” carry the same meaning.

The variety of names conveys the diversity of the beautiful African continent, however, the underlying principles that have been handed down many generations to guide this process are not new.

How it works

In Cameroon as in other parts of Africa, the Njangi helps individuals save money. When done as a group it gives access to large amounts of cash loans with little or no hassle. With major institutions having stringent guidelines for borrowers, especially those who may have recently migrated into the United States, njangi, sousou, pari and tontine have stepped in to provide some much-needed financial relief.

Whether it is a group of friends, an alumni association or just a handful of family members, some Africans have historically pooled their resources together to help each other achieve financial dreams. The detailed requirements may differ across countries, ethnic or cultural groups but overall, the process is built on a high level of trust. Njangis also provide an avenue to meet friends or family members, socially.

Take the example of a group of 10 friends who have formed a social group and njangi with a monthly meeting. Every month they each decide to bring in $500. Members could increase their stakes. Two members decide to bring in $1000 each instead of $500. That means there are 12 ‘hands’ of $500 each. The group, therefore, has $6000 at each sitting. In some groups, members may cast ballots to decide the order in which they take home the funds.

In other cultures, the hosting member takes home the funds and hosting rotates to a different member’s home each month. On the day of the meeting, everyone brings in their contributions and the first member takes home a cash packet of $6000. This process will rotate each month for a year to consume the 12 ‘hands’ of the Njangi. Each time a member takes home money, the member is said to have ‘chopped the njangi’. The two members whose contributions are doubled will have two opportunities to take home money. They could negotiate with other members on the collection times. In some larger groups members “chop” or borrow funds on a bi-weekly or even a weekly basis. The Njangi term is consummated when all hands have been chopped and the group can start over.

How it is used

Some groups use Njangis as a support system or investment club. They require members to leave behind a token whenever they collect funds. For instance, instead of taking home $6000 as in our example, each member leaves behind $50 which will be saved in a group account and could be used to invest in a mutual fund, visit a sick or bereaved member or some other purpose.

In some variations of this process, all funds pooled together can be borrowed. Some situations warrant the borrower to present some form of collateral such as a car or a house especially when the stakes are higher. In other cases, one or two members will have to surety a potential borrower. Trust is the dominant factor in groups practicing the Njangi.

Njangi funds have helped Africans achieve the dream of owning a home. They have also been used to pay tuition bills, buy a car or relief an immediate financial crisis. It has helped many Africans save as it creates a level of discipline since the funds are actually a loan and must be repaid.

Some Njangi groups are actually set up for investment purposes. Every time the group meets, they put money down and when a project comes up, they all go into the project as a group. Njangis have helped some African Entrepreneurs thrive and has been the stepping stone to low or no interest borrowing that has propelled many African businessmen and women into much higher gains.

Njangis could be compared to a secure line of credit. It could also be likened to an investment club. There are many Africans in the Diaspora who will laud this process for their financial success today. Njangis have the added benefit of developing deep and lasting relationships while achieving financial growth and independence.

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3 Comments

3 Comments

  1. LaBlaxicana

    October 19, 2008 at 3:43 pm

    Thank you for sharing this information with us. We do community saving a lot in Latino communities and I’m always surprised that Americans don’t use this system more.

    Maybe you’ll spark a resurgance!

    Thanks again.

  2. nel

    May 29, 2011 at 4:11 am

    Found this article after I was doing research on sou sous/ partners/ meeting money. I’m from Barbados, we call it meeting money, my great grandmother ran one. My friends from Haiti call it Main, my friends from Jamaica and Trinidad and St. Lucia call it Partner or Sou Sou. Many of us have bought homes, paid college tuition and other big things with this. Glad we kept up the tradition in the Caribbean.

  3. trini

    May 29, 2011 at 5:57 am

    I am from Trinidad and Tobago and my family has always used this system. My mom moved to the USA and has done a lot of major purchasing through sousou. My great aunt continues to run sousou and has helped built alot of families and kept them debt free because of this tradition. Thanks for sharing this article.

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Business and Development

5 Ideas for Online Investing in Africa

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It’s nice to have a little bit of money in savings. It’s even better when you can invest that money and watch it grow over time. Given modern technology, investing is now easier than ever. Are you interested in online investing in Africa but don’t know where to start? Here’s a rundown of 5 ways you can invest your money and enjoy strong returns.

1. Stocks

Stocks are the traditional investment vehicle. When you buy stock, you’re buying a small portion of a large company, and your investment rises or falls based on the fortunes of that company. It’s often smart to invest in so-called “index funds,” which include many different stocks to minimize risk. Finding an online platform for investing is a little bit trickier. You’ll need to find an online investment portal that services your specific country. For example, if you live in Kenya, you can buy and sell stock on the Nairobi Securities Exchange through firms like Apex Africa Capital. Here’s a look at the largest stock exchanges on the continent:
  1. Johannesburg Stock Exchange in South Africa (JSE)
  2. Nigerian Stock Exchange in Nigeria (NSE)
  3. Egyptian Stock Exchange in Egypt (EGX)
  4. Casablanca Stock Exchange in Morrocco (CSE)
  5. Namibian Stock Exchange in Namibia (NSX)
You just need to search for a firm that allows online trading for the stock market in your country.

2. Foreign Exchange

Trading foreign exchange (or “forex,” as it’s called) is simpler in some way than trading stocks and more complicated in other ways. It’s simpler in that there’s no regulated exchange, so you can trade forex from anywhere in the world using just your computer. But, forex is the most liquid market in the world with prices changing each minute, which makes it much more difficult for new investors. Because there is no regulated exchange for forex, there are fewer limitations on finding a broker online. Just make sure you read reviews before choosing a trading platform.

3. Real Estate

You can invest in real estate without purchasing your own rental property. Services like Realty Africa take online investments from around the world and then use them to fund hotels, factories, eco-lodges and other real estate projects. As those projects turn a profit, you get a cut of the profit in proportion to your investment. If you do want to purchase your own rental property, there are plenty of sites and services that will deliver options for you to consider. Angola, Nigeria, Egypt, Mozambique, Kenya and South Africa are among the countries that offer the best real estate investment opportunities.

4. Cryptocurrency

Cryptocurrency is digital currency that is created and traded outside the purview of a central bank, as more traditional currency is created and traded. Popular types of cryptocurrency include Bitcoin and Ethereum, and they can be traded via web-based platforms like BitPesa in Kenya and Luno in South Africa. Crytocurrency is relatively new, and the prices of various forms of cryptocurrency can be volatile. Be careful as you enter this type of investment, and be sure to do plenty of research first.

5. Micro Loans

If you want to invest your money and do something good at the same time, consider micro loans. Services like Zidisha connect investors to borrowers in developing countries who need relatively small amounts of money for key investments. Sometimes borrowers need inventory for their stores, and sometimes they need equipment to provide a service. Platforms like Oiko Credit allow you to make your money available to others while earning interest. It’s harder to enjoy significant returns with micro loans, but there is something fulfilling about seeing your money go to work in a meaningful way.

Always Do Your Research

Before you invest, always do your research. There’s both risk and reward with investing. Your goal should be to minimize your risk while maximizing your reward through whatever legal means you can.

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Business and Development

8 Ways Africans Can Make Money Online With Just A Laptop and Internet

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Just 20 years ago, making money required you to get out of your home and go to work somewhere else — an office, a job site, a store, etc. But, in the modern era, you can make a living with nothing but a laptop computer and an Internet connection. The Internet offers Africans access to a digital world where they can connect with others to sell products or provide services to earn money quickly. What are the best ways to make money online in Africa?

Here’s a look at 8 options

1. Create a Blog

Do you have a way with words? Turn those words into cash by blogging for a living. You can blog about anything under the sun, but it’s always best to blog about a topic in which you are both passionate and knowledgeable. Your passion will give you the energy and desire to blog regularly, and your knowledge will give your blog the authority needed to attract and engage an audience. How do you make money from blogging? You have several options:
  • Ads: Join a digital advertising network (like Google’s AdSense), and you can place little snippets of code onto your website that turn into ads for visitors to see. When someone clicks an ad on your site, you get a commission.
  • Affiliate Marketing: Large retailers (like Amazon) have affiliate programs that allow you to point visitors toward their products in exchange for a commission. For example, you can write about the best books on a certain topic. Amazon will provide special links to those books that are unique to your website. Then, when someone uses one of those links to buy a book, you get a cut of the action.
  • Products and Services: You can also sell your own products and services through your website. Are you an interior design expert? Sell design consultations to your visitors. Are you a digital marketing expert? Sell a PDF guide on search engine optimization or getting more social media followers.
  • Sponosored Post: Once your blog traffic grows, you can reach out to companies in industries relevant to your audience for sponsored posts. Sponsored posts promote a company’s products, services or brand in a subtle way to a target audience.
The key to a successful blog is two-fold: 1) You need to get started, and 2) You need to write consistently. It can take months for your blogging efforts to pay off, but, when they do, you’ll be glad you invested that time and energy.

2. Start a Vlog

“Vlogging” is a term for video blogging. Rather than posting words to a website, you post videos to a platform like YouTube or Vimeo. When you have enough viewers, you can join those platform’s ad networks — which means brief ads will run before your viewers watch your videos. Creativity is key when you get into vlogging. You need to vlog on a specific topic, and you need to make sure your content is something that people interested in your topic would actually want to watch. In fact, you want your content to be so good that people consider it can’t-miss.

3. Go After Freelance Opportunities

What are you good at? Today, there are lots of freelancing marketplaces where you can sell your services to companies that need them. Are you a graphic designer? Can you write a compelling blog post? Do you know how to build a professional-looking website? Use platforms like 99designs, Guru and Upwork to find freelance job opportunities and to secure high-paying work.

4. Pick Up Micro Gigs

What is a “micro gig”? It’s a small service provided in exchange for a small fee. Websites like Fiverr serve as micro gig marketplaces, connecting buyers and sellers so that all parties can benefit. You can do all sorts of work on micro gig websites, including data entry, translations, legal advice and much more. Identify areas in which you have good experience and skills, and then offer your services in those areas on Fiverr or other micro gig sites.

5. Sell Your Products Online

Do you make something that others would want to buy? Or, do you have access to a product that’s only available in your local area? If so, consider selling on sites like Etsy, eBay or iwearafrican.com.You can even sell on social media through Facebook groups, Facebook marketplace, and other similar platforms. You can focus on a specific type of product (like handmade jewellery), or you can look for general deals that allow you to resell online at a profit. Think through what you can make or what’s available near you, and then explore taking those products to an online marketplace. You can also sell non-tangible goods. If you are a skilled graphics designer or website developer, you can open up a shop and list your products on sites like Creative Market and Envato.

6. Write an E-Book

Do you have something to say that needs more space than a simple blog post? It’s time to write an e-book that can be sold through Amazon’s Kindle Direct Publishing or other digital channels. People self-publish both fiction and non-fiction each and every day using online tools. If you have a story that demands to be told, spend time writing it out and then share it online to make some money.

7. Rent Out A Room Online

People visit your hometown all the time, and they need quality places to stay. If you have a room to rent, place a listing on home-share sites like Airbnb and HomeAway. Then, when someone is visiting your city, they can rent a quality room — and you can make some money off their stay.

8. Become An Instagram Influencer

Here’s an interesting way to make money: If you have (or can get enough) followers on Instagram, companies will pay you to promote their products and services. A good example is @tokemakinwa, who has more than 2 million followers — and who makes boatloads of money from promoting products and services on behalf of clients. 'You cannot score a goal when you are sitting on the bench. To do so, you have to dress up and enter the game' - Israelmore Ayivor Click To Tweet Yes, you can make a great living without even leaving your home. You just need to get started. Does one of the ideas listed above stand out to you? Start by taking a small first step, and then continue exploring how you can turn your interests, skills or experience into cash.

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