‘Tontine’ microcredit helps Senegal women do business

Kodou Sene –

After months of waiting, 50-year-old Ndeye Khari Pouye has finally won the “cagnotte de la tontine”, a precious jackpot to help feed her chickens and maintain her livelihood.
Sitting on a mat surrounded by other women wearing traditional Senegalese wide-sleeved boubou dresses, she struggles to contain her glee.
“It’s my turn!” beams Pouye, who has just won a jackpot of 300,000 CFA francs (just over 450 euros, around $490).
Her financial good fortune is the result of a cooperative scheme organised among locals in the Medina area of Grand-Mbao, a neighbourhood on the tip of Africa’s west coast on the outskirts of the capital Dakar.
A common practice throughout Africa, many Senegalese take part in centuries-old microcredit schemes called “tontines” to finance their projects.
The name comes from Lorenzo de Tonti, an Italian exiled in France in the 17th century seeking solutions to shore up the French treasury.
The “cagnotte” is the jackpot.
Through the traditional savings arrangement, participants contribute sums of money and take turns collecting the prize.
The system helps borrowers overcome difficulties accessing credit as well as avoid prohibitively high interest rates.
“The tontine is the only way for me to save money.
Interest rates from the bank are too high,” says Ndeye Binta Ndoye, who takes part in four different tontine schemes, including one run by “Aunt Fatou” in another part of Grand-Mbao.
“Financial institutions make you sign loads of paperwork, even things you don’t understand.
It’s too complicated for someone like me who can’t read,” adds the hairdresser, who did not go to school.
A family atmosphere reigns as different generations mix at the gathering.
Sitting in chairs and on the ground, some hold babies as one by one, the women add their cash to the collection held in a dried gourd.

“Each member contributes 2,000 CFA francs (around 3 euros). That makes a total jackpot of 500,000 CFA francs (around 760 euros) which is given to the day’s winner,” explains “Aunt Fatou”, whose real name is Fatou Cisse.
She manages the tontine, which counts 250 members and lasts for five years.
“Back in the time of our mothers and grandmothers, people of the same age would group together to form a tontine. The money was used for family events, like baptisms,” says Fatou Cisse, a retired schoolteacher.
“These days, women are more ambitious. We realise that money used for useless ceremonies is being squandered — we need to invest in sustainable businesses,” adds Ndoye.
“I am the first wife in a polygamous household. My husband started building the house but had financial difficulties. He asked us — my co-wife and me — to finish” the work, she says.
“Thanks to the tontine, I was able to build three bedrooms and a living room. I am waiting to win another jackpot to build the rest. If this system of tontines did not exist, I would have to seek credit from a bank.”
In Grand-Mbao, the only other solution is a mutual benefit scheme which requires a guarantee deposit of 20 per cent of the loan at an interest rate of 1.77 per cent, to be paid back over 10 months, according to a source familiar with the system.

The tontine serves not only to launch new projects but also to keep struggling businesses afloat, like a poultry venture run by Mame Ngone Cisse.
“At the beginning of my project I had huge losses. But thanks to money from the tontine, I was able to restart my business. Thanks to God it’s going well,” she says.
The tontines are led by a committee of five to eight people who can read and write, while many of the participants are illiterate.
Mane Niang, whose education ended with middle school and has no formal accounting training, has the critical task of counting and recounting the cash in the tontine in the Medina area of Grand-Mbao.
“I almost never make a mistake in counting the money. There are two of us to do it. I call out someone’s name and she comes and drops her money in the bowl. Then we calculate the total. We always double-check with a calculator,” she says.
Specific measures are taken to instil confidence and ensure transparency. Whoever holds the pot of money does not live with the person who has the key to it, for example.
There is also a system of fines and symbolic punishment to encourage members to contribute regularly.
“Anyone accused of being late pays a fine of 200 CFA francs (less than a euro). If they continue to be late, the person gets pushed down the list of future winners. Sometimes we won’t even grant the loan until the person’s contributions get back on track,” says Niang.
But social pressure remains the leading sanction for anyone failing to meet the commitments.
“Culturally speaking, dignity and our image in society count for a lot to us women,” says Awa Cisse, who takes part in Aunt Fatou’s tontine.
“We wouldn’t dare burn up the money from the tontines without contributing: you’d get an earful — even your grand kids will still be hearing about it!” — AFP