The Gold Day Savings Club
A Turkish student of mine tells this story:
In April 2007 I was to be married but did not have enough money to fund my wedding. My sister, Gulsuh Helvaci, lent me $2,275 in gold and asked that I repay her in gold as well. Frankly, I was shocked she had the funds so readily at hand.
Living in a poor province in Western Anatolia and housed within a small town that receives its income from the production of figs, olives and cotton I was surprised by how Gulsah had been able to gather in the gold. I knew she could save only $6-10 per week, an amount insufficient to open a bank account. In fact, she would need to wait 300 weeks to open an account that offered enough interest to cover inflation.
Gulsah decided to take matters into her own hands. With three friends she formed the Gold Day Savings Club. Similar clubs in the area collected gold, dollars or euros but most were characterized by social activities that consumed the contributions of members. Little savings happened. But my sister had a different idea.
Assembling three other women intent on saving, she set the ground rules for her Gold Day Savings Club. Each member would give 15 Turkish Lira (about $10) per week during Friday meetings. To keep costs low, no treat would be served apart from hot beverages. Immediately following the meeting, the President would purchase one quarter Republic Gold. All gold and any remaining cash would be kept by the President. Lending to members would not exceed twice what a member had saved. Loans were to be repaid within three months, in gold of course, and in observance of Shari’a, carried no interest.
All was going well when the price of gold climbed. While the hike was good for the value of the group’s assets, it hampered the continued purchase of gold. The group decided to add six more members. Between 2006 and 2009, the club earned 17 percent on assets in real terms, plus members benefited from the loans.
As of December 2011, the club had ten members and total savings of $33,000. Despite the club’s success, Gulsah is reluctant to expand club membership. “It is much work to manage meetings with ten members, each bringing along a child, and all of us packed in a 40 square meter room.” But the Gold Day Savings Club is in high demand. While Gulsah and her group refuse to add members, they recognize the need for women to make secure long-term investments and thus have helped two more clubs form nearby.