BY JUMAI NWACHUKWU/CHRISTY ABOGHE/CHIKA KWAMBA/PAUL EGEDE
Osusu, a traditional cooperative savings system, has become a lifeline for many Nigerians, especially civil servants, in navigating the ever-mounting economic pressures. Widely embraced for its simplicity and reliability, this age-old financial practice is more than just a savings tool—it’s a safety net that fosters financial stability and community support. Insights from The Pointer reveal a common thread: for countless civil servants, Osusu is the quiet anchor keeping them afloat in turbulent economic waters.
Speaking with Mrs Ngozi Okolie, she said: “I joined an Osusu group because of the difficulty in accessing quick and affordable loans from traditional financial institutions. Banks often have stringent requirements, and Osusu offers a simpler, faster alternative.”
Mrs Okolie noted that for many, it provides access to lump sums of money that can be used to tackle pressing needs such as paying school fees, starting small businesses, or handling unexpected emergencies.
Similarly, Miss Elizabeth Njoku a civil servant shared, “Osusu has helped me finance my children’s education and renovate my house. It’s a practical solution to financial needs, especially with the inconsistencies in our monthly salaries.”
However, the system is not without its challenges. Trust among group members emerged as a critical concern. “We’ve had cases where people default or disappear after collecting their payout. Most groups implement strict membership rules, including referrals and financial background checks. Regular meetings and transparent bookkeeping are also measures to build trust and ensure accountability” she added.
In the same light, Mr Emeka Nwokolo mentioned that Osusu remains a vital lifeline for civil servants navigating the complexities of the current economic landscape, it has the potential to evolve into a more robust financial tool that meets the modern needs of its participants.
He emphasized the need for modernization which includes integrating digital payment platforms and apps to enhance efficiency and minimize the risks associated with handling cash. “If Osusu could operate like a fintech platform where payments and disbursements are automated, it would attract more people and reduce the stress of manual processes,” he said.
Meanwhile, a small business owner, Mrs Felicia Odafe, shared her experience with Osusu, recounting how she was initially sceptical when a friend introduced her to the idea. However, she eventually decided to give it a try, and it turned out to be one of the best decisions she had ever made.
“I can personally testify to how Osusu has benefited me,” she said. “Although not everyone has a positive story like mine, some fall into the wrong hands but this decision has been a blessing for my business and has helped me pay my children’s school fees. It’s been easy and efficient for me.”
Osusu Testimonies
What is Osusu? It is a traditional rotating savings and credit association common amongst Nigerians. It serves as an informal financial system where members contribute a fixed amount of money periodically, and each member takes turns receiving the lump sum collected.
According to a civil servant who chooses to be anonymous, it has fostered savings habits and provides her with access to funds without the need for formal banking institutions.
She said it offers an alternative to borrowing from financial institutions, which may have stringent requirements or high interest rates. Speaking on her motivation, she said, its simplicity, community-based approach, and ability to provide quick access to funds, making it an attractive option for individuals seeking financial support outside formal banking systems inspired her to join the cooperative group, and also the conviction that lump sum of money are given out at designated times, which can be used for major expenses like rent, school fees, or business investments.
She added that belonging to it has provided financial solutions to her as a civil servant, and provided a reliable way to accumulate savings and access funds when needed without resorting to high-interest loans.
One Mr Ike Egbo, a civil servant in one of the Ministries located at the state Secretariat in Asaba said the Osusu has helped him receive a lump sum of money at a scheduled time, which helps them cover major expenses like school fees, rent, or investments.
Mr Egbo said the low-interest loans which it offers compared to banks was another benefit of belonging to an osusu group as it provides a cost-effective way to access funds without high interest rates.
He however highlighted some of the challenges as the risk of defaulting, which is if a member fails to contribute after receiving their payout, others may suffer losses and mismanagement of funds by some dishonest leaders of the group can affect the osusu.
Another civil servant who spoke to our correspondent said ensuring trust in an Osusu was crucial for its success. He however highlighted ways to build and maintain trust among members, saying that the following should be considered; careful selection of members with reputation, setting rules regarding contributions, payout schedules, penalties for late payments, and dispute resolution, and electing a responsible and accountable leader to manage funds.
When Salaries Are Not Just Enough
Another respondent who spoke to our reporter in Asaba, Engr Prince Great said, “As a civil servant, what motivated me to join Osusu (Cooperative) is to meet up with life situation.
‘’Salary is not enough, and the prices of things are on the rise. For one to get certain things, looking at the prices and in larger quantity, one needs extra support like Osusu for such to be achieved.
‘’Also, one of the benefits which I have mentioned is the ability to purchase some needful things in larger quantity not minding their prices of which my salary is limited: Deep freezer for instance; as a family man or woman, one needs it but certainly not with my monthly salary but with the help of Osusu it’s a walkover.
Osusu can be improved if everyone is trustworthy. If the government can extend a helping hand to so many of them, it will be better.
‘’Well, to ensure trust among members, one of the first things to put into consideration is admitting people who have something to do or who have a salary account before initiating the idea of getting them into it.
‘’Giving someone who doesn’t do anything a slot to be part of the osusu group will never make it a success. He will first use it to feed, to save life and forget it is Osusu and at the end, you start battling on how to retrieve your money. So, the best way to gain trust among us is to do it with people who are either working (have salary accounts) or with businessmen/women among us.
According to Mrs. Onyeachie Olohivoni, ‘’what motivated me to join a cooperative (Osusu) group is to enable me to take a loan when the need arises. The sharing of dividends, and sometimes things are been sold to pay gradually such as land, and household properties.
‘’It (Osusu) can be improved if the funds given out to workers are increased. Even though it’s difficult to trust when it comes to money, members must be workers and have something visible to do, and since the money is taken from the source, it shows its reliability.
In the words of Gracious Odeiga, ‘’No civil servant can succeed in today’s economy without osusu. Due to limited access to credit facilities and the high interest rates of conventional financial institutions, I decided to join Osusu in my office so that I could pay my bills, and school fees and do necessary things for myself and my children without borrowing.
‘’The benefits of Osusu are that I have access to a loan without any collateral and for a low interest rate. Osusu helps me to save every month as a staff, having savings is a lifesaver.
Beware of Long Distance Osusu, Ntene Cautions
Additionally, Juliet Ntene noted ‘’Although I am yet to join any cooperative society for now except for the ones I do with some group of people which is very helpful. Sincerely, it is very helpful, it has helped me to make ends meet. It also helps one to streamline expenses as only things that your salary or money can do are considered very important. Over time I’ve benefited a lot from it, like buying some properties for the family. Before I joined the Osusu I made sure the people involved were reliable and trustworthy. It’s really helpful as long as the people involved are responsible, but I will advise never you to do a distance-Osusu because anything can happen.
For cooperative societies to thrive, they must operate on the principles of self-help, self-responsibility, democracy, equality, equity and solidarity. They adhere to values of honesty, openness, social responsibility, and caring for others. Cooperative societies can take various forms, including consumer cooperatives, producers’ cooperatives, workers’ cooperatives, and financial cooperatives, each serving different purposes and sectors.
Speaking to our correspondent in Agbor, the headquarters of Ika South Local Government Area of Delta State, the President General of Agbor Unique Multi-Purpose Cooperative Society Limited and also a civil servant, Mr Onuwa Christopher said the benefits of cooperative groups in fostering financial inclusion are manifold. They not only provide access to essential financial services but also promote economic empowerment and social cohesion among their members.
Industry Experts Speak
Cooperative societies offer their members access to affordable credit at a minimum low interest rate which can be used for various purposes such as starting or expanding a business, paying for education or covering medical expenses. This access to credit helps individuals improve their economic situation and reduces their dependence on informal lenders who often charge exorbitant interest rates.
Further speaking on the benefits, Mr Christopher said cooperatives encourage a culture of savings among members, providing them with safe and secure ways to save money. This helps members build financial resilience, enabling them to cope with emergencies and plan for the future.
He added that cooperative groups operate on the principle of mutual support, where members pool their resources to help each other. The risk-sharing mechanism provides a safety net for members, protecting them against financial shocks and uncertainty.
Meanwhile, Mr Johnson Nwajei, a civil servant said he was motivated to join a cooperative group to become one of the shareholders of the business to receive benefits such as discounts, training and dividends.
He added that he joined a cooperative group to gain easy access to loans with the lowest interest rates and pay back in instalments. He said, ‘’cooperative is run by and for local people within a geographic area, so profits stay local and are invested in the community.’’
Furthermore, the financial secretary of Agbor Unique Multi-Purpose Co-operative Society Limited, Mrs Okoh Blessing, a civil servant while speaking with our correspondent in Agbor said that slow returns on investment were identified as one of the challenges faced by the cooperative and the shareholders as it can strain the cooperative cash flow, as it might have allocated resources to these investment with the expectation of quicker returns.
She said a slow return on investment can erode investor and shareholder confidence, potentially causing a decline in the cooperative stock value and limiting access to additional capital. She lamented that there is difficulty in recovering loans given to their members as some are chronic debtors who are directly or indirectly intentional.
Mr Bienose Clement suggested that cooperative groups can be improved by ensuring adequate management, members’ investment and a clear mission. ‘’They can also be improved by using committees, advisers and outside expertise.
He added that cooperatives should provide their members with access to affordable credit, which is often more flexible and on better terms than those offered by traditional banks. This will enable members to invest in income-generating activities, improve their living standards, and build financial resilience.
However, Mrs Christina Ojobu said that to ensure trust among cooperative members, you should encourage open communication, build relationships and demonstrate integrity.
‘’Encourage members to communicate openly and honestly, recognize and value diversity, and also demonstrate integrity and reliability; encourage dedicated and participating members as no cooperative can succeed without them’’.
She added the use of technological advancements to provide programs and resources as well as host group sessions, where members can interact with one another and learn together. ‘’The in-person option will help build trust among members.’’
