A saving habit is a good thing for everyone involved in it. Many find it difficult to account for how they spend their income and bite their fingers at the end of the day. Some even say their financial enemies are the devourers. Truth be told, to survive and thrive in this kind of economy, saving is quite a good option. If you also have to get tangible projects done without the rigorous processes of accessing loan and the rest, then ‘thrift contribution,’ commonly known as ‘ajo’, is a way out.
While growing up, I remembered my kinsmen always said “don’t eat with your ten fingers“. This implies that while you spend, also do well to save. To learn the habit of saving then, a small wooden or metal box was made, known as ‘kolo’.
Every kolo has a very tight entrance through which money is deposited (no matter how tiny your hand is, it can’t get through).
A naira that doesn’t count when dropped into it becomes something tangible later. If you are really consistent with putting money into it back then, you realize the little one naira that did not count at first would matter when the box is broken/opened. Kolo is just a mini-way of making a drop to form an ocean. It is a case of using numbers (contributors) to grow.
A friend of mine discussed with me sometimes ago on how she got to enroll in a fashion school and also start her own fashion label at the completion of her six-months course.
“I got enrolled after contributing along with some market women in my area when I was a corps member. The commitment by the women coupled with my dream of becoming a fashion designer made me part with N5,000 monthly from my allowance”.
“I had wished to attend a fashion school before my NYSC but there was no fund. I, therefore, saw the opportunity when a small shop owner in my lodge introduced me to the contributory scheme. I had to play my part which is all down to my consistency. By the end of my service year, I had raised enough to enroll in the fashion school while I also live my dreams.”
Ajo (thrift) contribution is a contributory thrift saving scheme amongst a group of people. It can be done among colleagues in the office, traders, artisans, members of the community, etc.
It works such that a group of people come together and put resources, i.e. they put an agreed amount of money into savings each month, then at the end of every month, someone in the group takes all the money saved for that month, which is subsequently rotated among all the group members throughout the period of the monthly contribution.
A coordinator is usually chosen among contributors who administers the contributions and hands over the money to whoever is next in line (sometimes, members pick a number according to their size in this regard).
Ajo works like this: if there are twelve people in a money contribution group and each month they all agree to put fifty thousand nairas each into it, at the end of every month, each person would be entitled to a sum of six hundred thousand nairas. At the end of the rotation, you can either cancel the contribution or start all over again.
According to Mr. Taiwo, a secondary school teacher, he bought his first car through ajo, and most of his colleagues at the school where he worked also acquired their four-wheel drives among other things through the contribution.
He said gone are the days when teachers’ reward is in heaven. They’ve found a way to meet up in society through this monthly contribution. All he did to finally buy the car was applying discipline and consistency in paying the monthly contributions against all odds so as to achieve his goal.
A fraction of your income is all you need to part with if you are going into the contributory scheme. It is better as no charges would be deducted from your contributions as we have in financial institutions. Once you don’t default in giving your contributions, then your goals can be achieved with many benefits added.
Financial discipline: Many find it hard to save money and those who keep theirs in the bank always have one reason or the other to take from it. Putting your money in a contributory scheme will save you from touching your money even though “your grandma swallows razor in the village”. If you consistently do this, then you are certain to become disciplined with your finances, which is a plus for saving money in the long run.
It affords you the opportunity of embarking on a big project: If you have a big project ahead, then contributing consistently in the scheme makes it possible and easier. It would also be of benefit to you because it eases the pressure on your finances which means you don’t have to spend all your income on a project all at once. So if you are getting land or buying a car or other tangible things, then your consistency really matters in making it a reality.
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It can be used as capital for a startup or a big investment: Just as the case of my fashion designer friend, consistency in your monthly contribution can help launch you into the next phase of your life. You don’t have to wait for a lifetime for a grant or loan to start up that business. The good thing about getting your money in bulk is that you get it all at once which can be used to start up a business or invest it into a legitimate and profitable investment.
Many see good in a contributory scheme but they fear that their money might go down the drain. Madam Chinyere, a restaurant owner said she joined a contributory scheme of twenty people where they pay fifty thousand nairas monthly. She had paid up to six months when their coordinator disappeared. She later learned the coordinator, while trying to travel out of the country with their hard-earned money, was duped by a travel agent. Consequently, many, today, would rather save their money in banks rather than be defrauded by a fellow being.
In all, when a trusted hand is in charge of committed members, ajo has proved to be effective. Consistency, learned in this regard, is a key tool in achieving success in all other areas of life. Just as a wise man said: “the secret of success is consistency on purpose.”
Thank you for taking the time to read this piece. Do well to share your thoughts on this topic in the comments section below.