Thank You Payments...
I just had a delightful and stimulating time working with some folks forming Savings Groups in Niger and then Burkina Faso. I spent about a week with Emmanuel Zombre (to the left in the photo) who is managing a good size Savings Groups program in Burkina. Emmanuel and his colleagues have done a good job without the advantage, or possibly handicap, of having a lot of the standard training that most large programs get. As a result, they have had to think for themselves a lot.
Emmanuel's groups don't use the term interest when they are talking about the extra money that borrowers contribute to the group funds when they pay back their loan. Instead, he reasons like this:
"Most of our group members don't know what interest is. If some of them know it, they associate it with banks and it has unpleasant connotations. And yet, there is something like that in our tradition: if someone lends you something, when. you pay them back, you go see them and thank them, and traditionally you bring them a chicken, as a way of saying Thanks.
For the members of our groups, if someone takes money from the box and pays it back, it's appropriate to thank the members who let them use their money. But we can't have everyone bringing chickens to the group, so the person paying back the loan adds some extra money. We call that the "frais de remerciement", the "Thank You Payment".
Similarly, when someone is late for a meeting or does something else to offend the group, they apologize and also leave a small amount as a way of asking pardon. Emmanuel explains, "We don't call it penalty or a fine - that sounds like punishment. We call it the "frais de pardon", the "I'm sorry payment".
I think this is brilliant. I've never thought that "interest" was quite the right word. What they do in groups is sort of like bank interest, but the social relations around it are very different. The proof is that in Moslem countries interest payments are thought to be counter to Sharia, and yet many devout group members feel that these payments are permitted ... they just aren't like regular interest.
Sometimes to get around the word "interest", groups call the payment an "administrative fee". I understand, but that seems even farther from the reality of the group. The term "Thank you payment" - translated in Gourma or More or Haussa or whatever language people speak where you are - seems just right. And Emmanuel says he will be happy if anyone borrows the term.