As you all know, Africans are nearly always portrayed as impoverished. While this is a reality for many Africans, there is an African middle class and even an upper class, though the latter is rarely seen in rural communities. Still, even members of the African middle class can find themselves with scarcely a dime in their pocket. That is because the notion of economic class here is not necessarily a function of how much money you possess at a given time. The Beninese have monetary habits that are largely dependent on their social practices, notably interdependency.
Beninese spending can be summed up this way: "spend it while it's hot". Savings are rare here because if you have an unexpected expense, you simply borrow money from a friend. Because of that, many Beninese are eager to spend their money while they have it rather than see their money whisked away by a friend in need. Less prudent Beninese spend their money on fancy clothes, beer, and other luxuries, while more prudent Beninese invest the money in a construction project, often a home. If you put your money in bricks and mortar, your friends and family cannot borrow it from you, yet you are still investing in your future.
To illustrate Beninese spending habits, I'll take the example of a teacher friend. As a teacher, he makes an amount of money that is luxurious in a village like Sonsoro. Yet he said that as soon as he gets his money, he goes on a spending frenzy, buying nice clothes and other luxuries, so that two weeks after his monthly payday, he is already down to his last $2, even during months when a bonus doubled his salary. Essentially, no matter how much money he received, he would still spend it all every month.
Some clever Beninese come up with systems that allow them to accumulate assets that can be liquidated when they need a lot of money for a big purchase. For instance, most of the summer's crops have been harvested by Christmas. The corn is stored in sacks to be sold, preferably in the spring when prices are highest. Twenty sacks of corn, for example, is enough to buy a motorcycle if the corn is sold when prices are good. However, some people who never have a dime in their pocket and want to celebrate the holidays with fancy clothes and expensive beverages will sell a sack of corn in December to afford their celebration. These sacks of corn only fetch half of what they would in the spring, so forward-thinking Beninese buy these cheap sacks of corn in December and wait to sell them for a handsome profit in the spring.
Another system to save money for large expenses is a tontine. One of my friends is in a tontine. Every market day (once every four days in Sonsoro), each woman deposits $4 with my friend, who acts as their treasurer. In all, she collects $40 (six participants pay at the normal rate, and two pay at a double rate of $8 each market day). After two market days, once my friend has collected $80, she gives the money to one of the women, who uses it to pay for a large purchase that she needed to save up for. Each woman gets a turn to receive the money until everyone has had their turn, then the tontine cycle starts again. The order in which each woman will get her share may change every cycle, giving a woman who knows she needs the money at a specific time the opportunity to request to be the beneficiary around that date. My friend's tontine has existed for at least eight years, and obviously the system requires a lot of trust. Members of the tontine are not chosen lightly.
As a Peace Corps Volunteer, the Beninese spending and borrowing system works against me. When a Beninese person needs to borrow money, they target wealthy friends, relatives, and even strangers, believing they can give most easily (hence the importance of hiding your wealth or spending your wealth). Because of my white skin, I am automatically considered to be wealthy, regardless of whether it is true. This means that I am expected to be a lender, but never a borrower. Furthermore, because I follow American habits of setting some of my money aside in savings for a rainy day, that means I am far more likely than a Beninese person to have money on hand to be borrowed. Also, since American values expect self-sufficiency, it is hard for a volunteer to accept the Beninese system of interdependency to the point of asking someone else for money. Hence, Peace Corps Volunteers generally have nothing to gain and everything to lose from this system.
While some Beninese hate being targeted as lenders, others do not mind because of the local expectation, particularly rooted in the Muslim faith, that all good deeds on this earth will be rewarded by God after death. Therefore, while some Beninese actively hide and spend their money to avoid lending, others are glad to share in anticipation of divine reward.
Beninese spending can be summed up this way: "spend it while it's hot". Savings are rare here because if you have an unexpected expense, you simply borrow money from a friend. Because of that, many Beninese are eager to spend their money while they have it rather than see their money whisked away by a friend in need. Less prudent Beninese spend their money on fancy clothes, beer, and other luxuries, while more prudent Beninese invest the money in a construction project, often a home. If you put your money in bricks and mortar, your friends and family cannot borrow it from you, yet you are still investing in your future.
To illustrate Beninese spending habits, I'll take the example of a teacher friend. As a teacher, he makes an amount of money that is luxurious in a village like Sonsoro. Yet he said that as soon as he gets his money, he goes on a spending frenzy, buying nice clothes and other luxuries, so that two weeks after his monthly payday, he is already down to his last $2, even during months when a bonus doubled his salary. Essentially, no matter how much money he received, he would still spend it all every month.
Some clever Beninese come up with systems that allow them to accumulate assets that can be liquidated when they need a lot of money for a big purchase. For instance, most of the summer's crops have been harvested by Christmas. The corn is stored in sacks to be sold, preferably in the spring when prices are highest. Twenty sacks of corn, for example, is enough to buy a motorcycle if the corn is sold when prices are good. However, some people who never have a dime in their pocket and want to celebrate the holidays with fancy clothes and expensive beverages will sell a sack of corn in December to afford their celebration. These sacks of corn only fetch half of what they would in the spring, so forward-thinking Beninese buy these cheap sacks of corn in December and wait to sell them for a handsome profit in the spring.
Another system to save money for large expenses is a tontine. One of my friends is in a tontine. Every market day (once every four days in Sonsoro), each woman deposits $4 with my friend, who acts as their treasurer. In all, she collects $40 (six participants pay at the normal rate, and two pay at a double rate of $8 each market day). After two market days, once my friend has collected $80, she gives the money to one of the women, who uses it to pay for a large purchase that she needed to save up for. Each woman gets a turn to receive the money until everyone has had their turn, then the tontine cycle starts again. The order in which each woman will get her share may change every cycle, giving a woman who knows she needs the money at a specific time the opportunity to request to be the beneficiary around that date. My friend's tontine has existed for at least eight years, and obviously the system requires a lot of trust. Members of the tontine are not chosen lightly.
As a Peace Corps Volunteer, the Beninese spending and borrowing system works against me. When a Beninese person needs to borrow money, they target wealthy friends, relatives, and even strangers, believing they can give most easily (hence the importance of hiding your wealth or spending your wealth). Because of my white skin, I am automatically considered to be wealthy, regardless of whether it is true. This means that I am expected to be a lender, but never a borrower. Furthermore, because I follow American habits of setting some of my money aside in savings for a rainy day, that means I am far more likely than a Beninese person to have money on hand to be borrowed. Also, since American values expect self-sufficiency, it is hard for a volunteer to accept the Beninese system of interdependency to the point of asking someone else for money. Hence, Peace Corps Volunteers generally have nothing to gain and everything to lose from this system.
While some Beninese hate being targeted as lenders, others do not mind because of the local expectation, particularly rooted in the Muslim faith, that all good deeds on this earth will be rewarded by God after death. Therefore, while some Beninese actively hide and spend their money to avoid lending, others are glad to share in anticipation of divine reward.
Hmm. That's not a standard tontine. Lorenzo de Tonti's scheme was essentially a group annuity, in which shares of deceased members devolved to the survivors.
ReplyDeleteThe Beninese version seems more like a group savings account. It's too bad that the account doesn't take 5% of the deposits, and use them for investments, like the kind you mentioned. It might be a good way to encourage saving, if people could see the return.
Maybe you could talk more about the role of banks in Beninese life...
On the question of banks, I personally know of no one in village with a bank account, though there is a bank in Kandi. I think the bank caters to an economic class that simply does not exist in my village. However, there is a local lending institution called a CLCAM that operates like a mini bank. CLCAMs are very common throughout Benin. The fact that even my village of 4000 has one should be seen as an indication of their ubiquity.
ReplyDeleteIn general, any Beninese person who squirrels his money away in a bank or CLCAM would want to hide that from his family and friends so that they do not pester him for loans.
Have you ever been approached by someone for a loan? If so, was it for a legitimate need? How did you or would you handle that situation?
ReplyDeleteJean Ralley
In November, a student I work with asked me to give (not loan) her $20 to travel with her sister to her grandfather's funeral. I do suspect that I was targeted because she assumed that I must be rich, but I also know that her family is somewhat ostracized in village and she has no extended family there, so she might have few friends willing or able to provide the money, especially on such short notice. The story tug at my heartstrings because of my own father's death earlier in the year. This girl had willingly helped me in the past when I needed someone to water my garden if I was away for a few days. She also brought me a large bag of gari (cassava "flour") when she made the request.
ReplyDeleteUltimately, I suggested that I give her the money but that we consider it advanced payment for future services she would render. She said she did not want such an arrangement because she would feel wrong accepting money to help me. Our ultimate agreement was that I would give her the money and she would help me fetch water, but that each would help the other as a gesture of friendship rather than as part of a strict business arrangement.
Since that day, more than two months ago, she has never fetched a single drop of water for me. I suspect now that she never will. I wish she had respected our arrangement, but I would feel worse if she had been unable to attend the funeral because I had refused to give the money.
I wonder what would happen if you reminded her of the agreement or you just out and out asked her to fetch water for you.
ReplyDeleteJean Ralley
One time in December she saw me getting water from the pump (1.5 miles from my house), and she said, "Gee, that's a long way to go to get water!" It's ironic because per our agreement, she should be the one getting me water.
ReplyDeleteI was surprised by the many banks I saw in Cotonou. Given that it is a city of over a million people, I should not have been surprised. Perhaps the surprise was because I had seen little overt evidence of financial services in Kandi or Sonsoro (though maybe I saw a CLCAM). I was similarly surprised when I saw a Jeep dealership in Cotonou.
ReplyDelete