2015-12-31

STRANGERS AND FRIENDS: ROTATING CREDIT CIRCLES IN CAMEROON


By Sanna Tawah


One evening in April 2013 in Bamenda, Northwest Region Cameroon, I and my research assistant entered a compound and walked to the back of a house. It was already dark, but we saw a dim light gleaming from an open door of a detached room accessible only from behind the house. The sole purpose of the room seemed to be for different kinds of meetings and gatherings. There were chairs distributed around the room, an old sofa and one small table. An elderly man, the chairman of the meeting, was sitting behind the table with a large accounting book in front of him. I and my research assistant were asked to be seated.

There were some 20 people present in the meeting, both men and women who were seated on separate sides of the room. They explained to me that their group was called “Strangers”. The meeting started and the first topic to be discussed was my presence at the meeting, since after all I was a stranger among the Strangers. One woman suggested I should contribute and give money to the njangi members, because as a researcher I would “benefit” from the information they were going to give me.

The chairman of the meeting asked me to introduce myself and my purpose of attending the meeting. I introduced myself and explained that I had come to learn about njangis, that is, rotating credit circles, and that I was thankful that they had let me participate in their meeting. The discussion continued for some time about my participation. Finally it was agreed that I could stay, and that I was welcome among the Strangers. Women began pouring white mimbo (white palm wine tapped from raffia palm trees) into cups and shared kola nuts among the njangi members.

Members were called by name and they took their monetary contributions to the meeting chairman, who wrote individual contributions into the njangi accounts book. An active discussion and sharing of news was ongoing throughout the meeting. The members came from different backgrounds and occupations, but many of them were market traders in the markets in and around Bamenda city. After everyone had contributed, the chairman calculated the money. The lump sum was then given to one of the members, whose turn it was to receive the whole money pot this week.

Njangi is the Cameroonian version of a Rotating Savings and Credit Association (ROSCA). They are njangi in the Anglophone region; in the Francophone areas of Cameroon they are called tontine. There are similar rotating credit circles or “money-go-rounds” all over the world: the tanda in Mexico, susu in Ghana, upatu in Tanzania and arisan in Indonesia to name a few.

In Cameroon, the njangi is very important for small-scale market traders since it is mainly through the njangi that market traders, the buyam-sellam in Cameroon pidgin, fund their small trading businesses. The buyam-sellams are small-scale producers and literally ‘buyers-sellers’ travelling between small village bushmarkets and the larger town markets to buy and sell agricultural produce, consumer goods and other seasonal products. The nature of their trade is such that they are continuously on the move between rural farms, village bushmarkets and urban marketplaces. 

Bamenda Food Market. © Sanna Tawah.

Due to their mobile trading style, the buyam-sellam trade is vulnerable to external market shocks and price fluctuations. Njangis meet traders’ financial needs when they need to make bigger investments in the trading business. It is an informal credit arrangement in which individuals, generally from the same neighborhood or trading area, agree to regularly contribute money to a common pot. The meetings can be weekly or monthly, and the group can be of different sizes and compositions. Njangi is played in market places, in meeting rooms, in private homes, in restaurants, in schools, basically anywhere that people decide to start one.

There are also other type of informal saving groups in Cameroon, since the buyam-sellam traders and small-scale farmers rarely have bank accounts. Some of them have accounts in local credit unions or with specific farmer’s credit unions, which have smaller service fees and are more adapted to the financial needs of the local farmers and small-scale traders. But having an account in a credit union does not solve the need for extra capital for making trade-related investments and supporting trading activities. Credit unions give out loans, but they come at an interest rate. In some cases, informal savings groups also give out loans, with a smaller interest rate than credit unions.

The rotating njangi cycle starts by drawing lots to determine who will receive the pot in which order for the duration of the njangi. For example, if there are 20 members, the njangi cycle is generally 20 weeks. The cycle of the njangi is such that in a weekly meeting, all the members contribute a certain amount, whether it is CFA 1000 (1,5 €), CFA 2000 (3 €), CFA 4000 (6 €) or more, and a treasurer collects the combined contributions. It is the surplus money from trade that is being put in the common pot, and the weekly pot represents a large amount of money equal to 20 individual week’s savings. Each week, one member receives the pot and can use it to invest in market trade, school fees, medical costs or any other needs the household may have.

Etang, Fielding and Knowles (2011: 464) made a study in 2007 on ROSCAs in the southwest province of Cameroon in a village with approx. 1000 inhabitants. They noted that there were 17 active ROSCAs in the village, with a total of 426 members. The size of the ROSCAs varied between 11 to 45 members, and the average age of the ROSCA was 8 years. Bouman (1995) estimated earlier in the 1990s that more than 50% of the adult population in some African countries, including Cameroon, belongs to a ROSCA.

The njangis and savings groups I visited in Bamenda had been functional for much longer, for example in 2013, one had already operated for 15 years and another one for 26 years. I also conducted a survey with 78 market traders (43 female, 35 male) in Cameroon in 2013 and 81% of them belonged to a njangi. Many of them also belonged to more than one njangi: 46% belonged to one njangi, 40% to two njangis and 14% to three njangis, and 1% to more than three njangis.

The figures show that njangis are a significant part supporting people’s livelihoods. My survey data from 2013 indicates that 71% of those traders who were njangi members attende­d njangi meetings weekly. However, it would need a larger survey to conclude whether njangi membership is nowadays more popular than in earlier decades, and what might be the reasons for their growing popularity. The njangis have an important social aspect also; the latest news are shared and plans are made.

Although njangis are informal gatherings, they have commonly agreed-upon rules that are socially controlled, and social sanctions are used against those who do not follow the njangi rules. Even if members are not able to participate in the meeting in person, they can send their contribution with another member or ask a relative or friend to take their contribution to the meeting.

I was told in the njangi meeting that the group ‘Strangers’ has been active since 1987. Some of its original members have passed away, some have moved away, and some have left the njangi due to other reasons, but in 2013 the njangi had been functional for 26 years and in 2013 it had a total of 30 members, of which 20 were present in the meeting. The Strangers was a combined njangi and savings group. Membership is decided based on whether the applicant is considered trustworthy and capable of keeping up with the weekly payments.

Towards the end of the meeting I asked: why is the njangi group called ‘Strangers’? I was wondering if the name had a specific meaning. One elderly man stood up and explained that “We are called Strangers, because we are all strangers in this world”.



References



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