Ayuuto: Somali Women’s Money Lending Handbook for Braving the Crisis | Features

Mogadishu, Somalia – Once a month, a group of 10 women gather in Layla Hussein Tawane’s makeshift shelter in a camp for displaced people in Mogadishu. Each of them brings $10 to contribute to a common pot.

Tawane, the leader of the group, gives the total money to one person and the next collection goes to another in a similar process until each member receives their pot. Throughout the camp and in towns across Somalia, similar groups meet around the same time.

Known as Hagbad or Ayuuto (Somali for “help”, with roots in the Italian word “aiuto”) in Somali culture, it is a trust-based interest-free rotating savings system mutual. It is mostly run by women from the same neighborhood who not only know each other but also share common experiences.

“At the beginning of each month, when we meet to collect the money, we discuss the challenges we face, including the security situation in the camp,” Tawane said. “We also talk about our children and their education. Most importantly, we listen to each other and offer help where we can.

Last month, one of the members, a mother of five, applied for a loan to help save her small grocery store which was about to close due to financial problems. The group agreed to lend her money from the pot, which she began paying back in small amounts after seven days.

These women were among the thousands displaced by the worsening drought in Somalia and fled with their children to the capital after losing their livelihoods.

Since 1991, when the central government was overthrown, Somalis have been caught in an endless cycle of political instability, terrorism, famine and recurring droughts, each exacerbating the others. Currently, nearly three million internally displaced people are dispersed in more than 2,400 settlements across the country.

The Horn of Africa region is facing the driest conditions in 40 years and the United Nations estimates that more than 4.5 million people across Somalia are in need of humanitarian assistance, compared to 3.2 million in December last year.

Over the past three months, more than 700,000 people have been displaced after three consecutive rainy seasons without rain. They ended up in sprawling camps in major cities – which are already struggling to accommodate millions of people uprooted by violence and previous famine.

“We are all affected by drought, our farms and livestock have been wiped out,” said Tawane, who moved to the capital with her eight children two years ago from Qoryooley town in Lower Shabelle region, in the south of the country.

She used to depend on herding and subsistence farming, but knew it was time to move on when she lost 20 goats and 10 cows – her entire herd – to drought, and then her crops. withered.

“All that remained was to escape to save our lives,” she told Al Jazeera. “I don’t even know what happened to my house, there is literally no life there.”

Tawane was well aware of the living conditions in the camps – usually overcrowded and without sufficient food or water. As soon as she settled in the Kahda district of Mogadishu, she mobilized the women of the region to create their own Ayuuto.

For Layla Tawane and other women inside and beyond the camp for displaced people in Mogadishu, Somalia, the concept is not just about money [File: Shafei Mohamed Dahir/ Al Jazeera]

A lifeline for many

The practice of social lending and savings is widely used in many parts of Africa and different communities call it by different names. It is sometimes considered risky, as it is unregulated and not covered by any formal financial compensation scheme, but it is also a lifeline for many.

In Somalia, Ayuuto permeates many aspects of socio-economic and cultural life as it is often a safety net for families to fall back on during crisis – in the absence of social protection programs from the community. ‘State. It is also practiced on a large scale in the diaspora with thousands of dollars pooled each year by family and friends.

For example, when the coronavirus pandemic hit the global economy, members of the diaspora who lost their jobs turned to Ayuuto program savings to send money to loved ones back home.

In the camps in Somalia, this is even more convenient than waiting for donor aid.

“If any of us need money for an emergency, we automatically lend them something from the jar,” Tawane said. “It is the most important part of the system because there is nowhere else where we can easily access financial aid.”

While many camp residents use mobile money for daily transactions, they do not have access to formal financial services or moneylenders. The banks have strict eligibility criteria, including the need for a financial guarantor, credit history and financial identity, which most women in the camps are unable to provide.

“Although there are risks associated with the system, such as the absence of a binding contract or the disappearance or death of the caretaker, Ayuuto remains a favorable alternative – for poor women – to the formal banking system because it is less complex and more flexible,” said Amina Haji. Elmi, Executive Director of Save Somali Women and Children.

“Bank loans are difficult to obtain given the collateral required and the interest charges, even in the Islamic finance system which also has heavy charges,” she said. “Ayuuto supports women’s groups in times of need.”

As pot keeper, Tawane is responsible for overall member management, including administration and recruiting. The total amount pooled depends on the contribution of each member, which is always fixed.

“I’ve done Ayuuto all my life, so I’ve become an expert now,” Tawane said. “Although I can’t read or write, I do all the calculations in my head and my son helps me keep the records.

“Before the drought, I used to collect $15 from each member, but things have changed now. Aid from aid agencies has drastically decreased and there are no job opportunities in the city.

The payout is modest but quick and the cycle often lasts a few weeks. The money generated helps the women buy extra food and sometimes start small businesses such as selling milk or firewood.

More than money

“Some of my customers use Ayuuto’s money to buy things from me,” said Dawlaay Muqtar Macalin, a mother of 12, who sells vegetables in Waberi district. “I am not in an Ayuuto program currently because I do not have enough income to save and the little I earn goes to my children’s daily consumption.”

She used to buy the vegetables in Afgooye, a farming town 30 km northwest of Mogadishu, but the river has dried up and food prices have also risen.

Dawlaay Muqtaar Macalain, vegetable seller in a camp for displaced people in Mogadishu
Dawlaay Muqtaar Macalain, a vegetable seller in a camp for displaced people in Mogadishu, the Somali capital [File: Said Fadhaye]

For Macalin customers, Ayuuto serves as a virtual credit card that they can use to purchase groceries – they buy things and pay later when they receive their share of their respective Ayuuto programs.

But experts say Ayuuto is more than just about money for Somali women.

The social loan program also “provides a space where women come together to support each other emotionally, mentally and share their challenges, especially during the crisis,” said Zainab Siraad, founder of the Somali Gender Equity Movement. “They encourage each other to overcome all the problems [they are] focused towards.

“Women with limited incomes need these self-help groups to save money, which they could not save on their own,” she added. “But they need formal financial support and skills not only to cover their basic livelihoods, but also to access private sector loans to start businesses and achieve sustainable financial independence.”

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