Ayuuto: The Somali female money lending manual on braving crisis
As drought and famine continue to plague Somalia, women are using a centuries-old scheme to help each other.
Mogadishu, Somalia – Once every month, a group of 10 women gather at the makeshift shelter of Layla Hussein Tawane in a camp for internally displaced people in Mogadishu. Each of them brings $10 to contribute to a common pot.
Tawane, the group’s leader, hands over the total money to one person and the next collection goes to another in a similar process until every member receives their pot. Across the camp and in cities across Somalia, there are similar groups meeting about the same time.
Known as Hagbad or Ayuuto (Somali for “help”, with roots in the Italian word “aiuto”) in Somali culture, it is an interest-free rotating savings scheme based on mutual trust. It is primarily run by women in the same neighbourhood who not only know one another but also share common experiences.
“At the beginning of every month when we meet to collect the money, we discuss the challenges we are facing including the security situation of the camp,” said Tawane. ‘We also talk about our children and their education. More importantly, we listen to each other and offer help where we can.”
Last month one of the members, a mother of five, asked for a loan to help save her small grocery which was almost closing down due to financial problems. The group agreed to lend her some money from the pot, which she started to repay in small amounts after seven days.
These women were among the thousands displaced by Somalia’s worsening drought situation and they 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, almost three million internally displaced people are scattered in more than 2,400 camping 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, up from 3.2 million in December last year.
Over the last three months, more than 700,000 people have been displaced after three consecutive rainy seasons with no rain. They have ended up in sprawling camps in major cities – which are already struggling to host millions uprooted by violence and previous famine.
“We are all affected by the 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 country’s south.
She used to depend on livestock and subsistence farming but knew it was time to move when she lost 20 goats and 10 cows – her entire stock – to the drought and then her crops withered away.
“There was nothing left but to escape for our lives,” she told Al Jazeera. “I don’t even know what became of my house, there is literally no life there.”
Tawane was well aware of the living conditions in the camps – usually overcrowded and neither enough food nor water. As soon as she settled in Mogadishu’s Kahda district, she mobilised women in the area to start their own Ayuuto.
A lifeline to many
The social lending and savings practice is widely used in many parts of Africa and different communities call it different names. It is sometimes seen as risky, because it is unregulated and not covered by any formal financial compensation schemes, but it is also a lifeline to many.
In Somalia, Ayuuto permeates many aspects of socioeconomic and cultural life as it is often a safety net for families to fall back on during crisis – in the absence of state welfare programmes. It is also practised on a large scale in the diaspora with thousands of dollars pooled annually by family and friends.
For example, when the coronavirus pandemic hit the global economy, those in the diaspora who lost their jobs would turn to savings from Ayuuto schemes to send money to their loved ones back home.
In the camps in Somalia, it is even more practical than waiting for donor aid.
“If one of us needs money for an emergency, we automatically lend them something from the pot,” said Tawane. “That is the most important part of the system because there is nowhere else we can access financial assistance easily.”
While many in the camps use mobile money for their day-to-day transactions, they do not have access to formal financial services or lenders. 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 scheme such as lack of binding contract or the keeper’s disappearance or death, Ayuuto remains a favourable 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 considering the collateral required and interest charges on it even in the Islamic financing system which has significant charges as well,” she said. “Ayuuto supports women groups at times of need.”
As the keeper of the pot, Tawane is in charge of the overall membership management including administration and recruitment. The total amount pooled depends on how much each member can contribute, which is always fixed.
“I have been doing Ayuuto all my life so I became an expert now,” said Tawane. “Although I don’t know how to read or write, I do all the calculations in my head and my son helps me with the record-keeping.
“Before the drought, I used to collect $15 from every member but things have changed now. Assistance from the aid agencies has significantly reduced and there are no job opportunities in the city.”
The payout is modest but quick and the cycle often runs for a few weeks. The money generated helps women buy extra food and sometimes start small businesses such as selling milk or firewood.
More than money
“Some of my customers use Ayuuto 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 scheme currently because I don’t get enough income to save and the little I earn goes to my children’s daily consumption.”
She used to buy the vegetables from Afgooye, an agricultural town 30km northwest of Mogadishu but the river has dried up and food prices have gone up too.
For Macalin’s customers, Ayuuto serves as a virtual credit card that they can use to buy food items – they buy things and pay later when they receive their share from their respective Ayuuto schemes.
But experts say Ayuuto is more than just about money for Somali women.
The social lending scheme also “provides a space where women come together to support one another emotionally, mentally and share their challenges, particularly during crisis”, said Zainab Siraad, founder of Somali Gender Equity Movement. “They encourage one another to overcome whatever problems [they are] facing.
“Women with limited income need such self-help groups to save money, which they would not be able to save on their own,” she added. “But they need formal financial support and skills to not only cover their basic livelihoods but to access loans from the private sector to start businesses and reach sustainable financial independence.”