How to Start a Savings Circle

Circles with a purpose finish. Circles started as a general good idea tend to lose a member around round four and unravel from there.

The purpose sets everything downstream. A rent deposit needs a specific sum by a specific month. Business stock needs a lump that recurs. School fees are seasonal. Write down the amount and the date first, because the contribution and the schedule fall out of them rather than the other way round.

This is the step that decides whether the circle works, and it is the one most people rush. You are extending an unsecured loan to everyone who gets paid before you, with no collateral behind it.

• Five to twelve is the working range. Fewer than five and the pot is too small to be worth the coordination. More than twelve and the cycle runs so long that the last member waits a year for money they started paying for in month one.
• Pick for reliability, not closeness. The relevant question is not whether you like someone. It is whether they have a steady income and have kept commitments to you before.
• Prefer a connected group. A circle where every member knows every other member enforces itself. One where members only know the organiser puts the entire burden on one person.
• Be able to say no. Someone will ask to join whom you would rather not include. Deciding the criteria in advance turns that into a rule rather than a personal rejection.

The single most common cause of failure is an amount set at what members could pay in a good month. Set it at what the least comfortable member can pay in a bad one.

Match the frequency to how members are paid. Weekly circles suit market traders and anyone on daily takings. Monthly suits salaried members. Fortnightly mostly creates confusion for no benefit.

More circles die of arguments about the order than of anyone stealing anything. Fix it before money moves, and make it visible to everyone.

• Draw lots if no one has a pressing deadline. Nobody can claim it was arranged.
• Assign by need if one member has a dated obligation and the rest do not mind. Say so openly, so it is a group decision rather than a favour discovered later.
• Do not leave it open to be settled round by round. That guarantees the same negotiation twelve times, and it is where resentment accumulates.

One rule that costs nothing and prevents the classic failure: if trust across the group is uneven, put the least-known member last. Their exposure to the others is unchanged; the group's exposure to them drops to nothing.

Somebody will miss a payment. That is not a sign of a bad circle, it is a certainty of every circle, and the difference between one that survives it and one that does not is whether the answer was agreed while everyone was still calm.

• How many days late before the group is told?
• Does the round's recipient still get paid, from a short pot or not at all?
• At what point is a member removed, and what happens to what they have already paid?
• Can a member sell or swap their position in the order?

Write the answers down and give every member a copy. Four sentences agreed in week one will settle an argument that would otherwise end the circle in month six.

This is the decision with the most at stake and the least deliberation. There are three realistic options.

• Cash to an organiser. Works, and has for centuries, but it puts the whole pot in one person's hands each round and leaves no record when someone disputes a payment. It also makes the organiser's job genuinely unpleasant.
• Bank transfers with a shared spreadsheet. Better records, but somebody has to reconcile it every round, and chasing late payers becomes a personal task rather than a system.
• An app built for it. Contributions collected automatically, payment status visible to every member, reminders sent without anyone having to send them, and the pot paid to the recipient without passing through an intermediary.

The steps above are the same in the app; it just enforces them instead of relying on everyone remembering. Create a group with the contribution amount, the frequency and the member limit. Share the invite link, with admin approval on if you want to vet joiners. The payout order is set and visible to every member before the first round opens.

Money moves through Stripe Connect straight to each round's recipient, so no member ever holds the pot. Payment status per member per round is on the group screen, reminders go out automatically, and an admin can remove a member who stops paying. Trust scores and reviews carry across circles, which is what makes a newcomer to a group verifiable.

Creating and joining are free, and contributions carry no added fee — you pay exactly the contribution amount. Fees come out of the pot only when you receive a payout: a 5% platform fee (minimum $0.30), plus Stripe's own costs passed on with no markup — what it charged to collect the round's contributions (about 2.9% + $0.30 per card payment, about 0.8% per bank payment), payout processing of 0.25% + $0.25, and a $2 account fee on your first payout of each calendar month. On a $700 pot paid entirely by card, that is $35.00 + $23.30 + $2.00 + $2.00, leaving $637.70; paid by bank debit, about $655.40. There is no subscription.

One constraint to know before you invite anyone: every member of a circle must be registered in the same country. Payouts settle through Stripe Connect, which will not settle a cross-border payout from our platform, and the app enforces it at signup rather than mid-cycle. See the 42 supported countries, or the diaspora guide if your group is spread across borders.

• What a susu is — the mechanics, a worked example, and the risks stated plainly.
• What a ROSCA is — the same thing in the language of economics, and why it holds without collateral.
• Esusu and ajo, in an app — the Nigerian terms, what an alajo collector costs, and where it works today.
• Help center — setup, contributions, payouts, invites and verification.