FUNding with friends
The future of savings and borrowing is learning from the past.

Across the country, millions of Americans are living paycheck to paycheck, struggling to pay their bills, to raise capital to start a business, to make a big-ticket purchase that can improve their quality of life. Banks shy away from them because their credit score is bad. Their credit score stays bad because they are largely excluded from the mainstream financial system. Financial challenges remain, especially for those with less education and for minorities. Racial and ethnic minorities of each education level are even less able to handle a financial setback.
In March 2020, the onset of the COVID-19 pandemic altered the financial landscape for many American families. In a government survey on the well-being of American households dealing with unexpected expenses, the most common approach to cover a $400 emergency expense is to put it on a credit card and pay it over time.
APR can range from 15-21% on top of annual fees and late fees. Although so many incurring additional costs for a modest expense is disconcerting, some with no emergency fund would choose to borrow even if they had $400 available, preserving their cash as a buffer for other expenses.
A better alternative to saving and borrowing
People are tired of paying high-interest rates for credit cards, banks, and payday loans. They’re tired of being labeled with credit scores that do not accurately illustrate their real credit capacity. They’re tired of filing stacks of forms to qualify for small loans. People are looking for new alternatives to solve their financial problems.
The solution: a community-based financial concept
Enter so-called rotating credit and savings associations (ROSCA), a centuries-old community-based system where members pool money into a common fund, usually in regular monthly payments, and at the end of an agreed-upon funding cycle, a single member withdraws the lump sum. A different member receives the funds at the end of the next cycle, and so on.
A popular global phenomenon
They’re called tandas or juntas, quiniela or panderos(Latin America), cundinas (Mexico), susu or sou sou (West Africa and the Caribbean), hui (會) (China) and Southeast Asia), kye (계) (South Korea), and pandeiros (Brazil).
The system gives participants access to a larger pool of money than they would have saved otherwise. The funds are typically used for short-term such as saving for travel, car repair, child care expenses, and dental work. Or, to tackle long-term goals such as paying off high-interest credit card debts, launching businesses, education fees, purchasing homes, and medical emergencies.
In the time of a pandemic, COVID-19 has deterred people to organize groups in person. Some face logistical difficulties in joining the group. It’s time to bring this age-old financial concept out of the shadows. Communities need a better financial alternative to payday lenders who charge out-of-control interest rates.
This kind of collective technique is a way to save with a group without sharing a bank account (traditionally, without even having a bank account) or incurring more debt. Working with others increases motivation to save. The consequence of missing payment was letting down friends. It is a harsher penalty than a default notice from a bank. You feel better when you’re saving with someone you trust. Moreover, the money you put in is the money you get out. It is not a pyramid scheme where the promised return is astronomical and you have to continue to recruit others.
The digital co-savings app
A centuries-old financial system—where friends and family pool money fund each other’s financial goals—gets a makeover for the digital age.
Joola offers users the ability to create a saving circle with friends quickly and with ease. The easy-to-use dashboard enables users to get a full picture of upcoming payments and payouts–making financial planning easier. All payments and payouts are automated so you and your friends do not need to have an awkward conversation about money.
With only 5-8% one-time fee per group when you withdraw early, the fees are much lower than interest rates offered by traditional banks or payday lenders. Additionally, the national savings rate is only averaging at 0.05% APR means your money is losing its value sitting in your bank account. It’s easy to earn 1-2% bonus simply by waiting to receive your payout. Join Joola to support each other and boost your savings at the same time.
Yes, you can DIY this kind of thing for yourselves, by putting the money in the account. But the question is, will you do it? Stick to it and remain accountable?