These micro savings groups focus on pooling and investing savings. Members agree to contribute a certain amount on each meeting and then on the same meeting the total amount collected is given to some members on a rotation basis. I would advise people to try this saving method, it has worked for a number of people.
I don't know if this is similar what we have practising in my school. we call this micro saving in our dialect as "paluwagan" or as a financial aid or assistance. every month the teachers are contributing Php100 (50 USD). The money collected is lent to a certain teacher. Then she pays it in agreed installment basis. Any available amount again is loaned to another teacher. The same mode of payment is observed. And in the year end, all money is settled and the interest collected is divided among the teachers equally.
My mother is engazed with half a dozen micro saving groups. I always discoutraged her and asked to save in banks instead. However, for years she had been saving on various micro saving groups. I earn more than my mother, however, when we checked our savings, my mother had more money with micro saving groups than I had in my bank. Good thing about Microsaving groups is they give you more interest on saving than a bank.
This is the type of savings my mother uses since she belongs to so many women meetings that pool together funds and split it into how much one has contributed at the end of the year. It has really helped us in a way that you don't have to get into a financial struggle during the festive seasons when the prices of goods and services are quite high in this part of the world. So, it is the type of savings I would advise people, especially those involved in the business to try out since it is a sure way to save up for the future and not worry about where to source for funds during the festive periods.
We have that king of micro savings system when I was a student. We call it Rotation because of the rotation of the collection. But when I got employed, we had a micro savings in the office which is actually a credit union of sorts. We remit an amount to the collector every payday and the pooled money is lent to our our officemates with interest. At the end of the year, members of the savings group receive the principal and the interest. That's much better than the rotation system which yields nothing but just like playing with money. Worse, the last to collect may have a problem is some members wouldn't pay their dues.
My mother is a part of a micro savings group where everybody contributes money and then splits it after some time. I quite don't understand this method and tell my mom to save this money in her bank account but she has been doing this for so many years with her other friends so she doesn't want to leave her friends.
