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Frequently Asked Questions

Category: Lending circles

How does it work?

A small group of people come together, agree on how much they will put into the general fund each month, and they hold each other to it. Let’s say a group of five people agreed to contribute $10 per month for five months, at the end of each month, one person from the group gets $50. You keep going until everyone has had a chance at the $50. This is a popular way for people who don’t have bank accounts, who want to save money, or who can't get approved for mainstream loans to get access to capital. By relying on our neighbors, everyone benefits.

What's a Lending Circle?

A lending circle is when people get together to form a group loan. Everyone in the group contributes money to the loan, and everyone gets a chance at taking the loan out. People across the world organize loans between friends or family without a financial institution all the time.

This practice is known by many different names across the world: Susus throughout Africa, Paluwagan in the Philippines, Lun-hui in China, and Tandas in Mexico. Participants may not have access to a bank, or may not be a good candidate for a traditional loan, or they may just prefer getting loans from people they know and trust.