Savings group glossary: 40 terms explained in plain English

Savings groups have their own vocabulary, and different countries use different words for the same thing. Here's a plain-English reference. Terms link to fuller guides where we have them.

#Types of group

ROSCA (rotating savings and credit association) — A group where members pay in the same amount each round and one member takes the whole pot, rotating until everyone has had a turn. See what is a merry-go-round.

Merry-go-round — The everyday name for a ROSCA in many English-speaking countries.

Susu — Ghana's name for both rotating savings groups and collector-based savings. See the susu guide.

Chama — Swahili for "group"; a savings, investment or welfare group in East Africa. See the chama guide.

Esusu / ajo — Rotating and collector-based savings in Nigeria. See esusu and ajo.

Tontine, stokvel, tanda, committee — Names for rotating savings circles in francophone Africa, South Africa, Mexico and South Asia respectively.

ASCA (accumulating savings and credit association) — A group that keeps savings in a shared fund and lends from it, instead of rotating a pot. See ROSCA vs ASCA.

VSLA (village savings and loan association) — A widely used ASCA model with meetings, a lockbox and share purchases.

Welfare fund — A group fund that supports members through bereavement, illness and emergencies.

#Contributions

Contribution / dues — The amount each member pays per period.

Minimum contribution — The least a member must pay each period; some funds allow more. See how to set monthly dues.

Period / round — One cycle of contributions: a week, fortnight or month.

Pot — In a merry-go-round, the total collected in a round and paid to one member.

Payout order — The sequence in which members receive the pot. See deciding the payout order.

Due day — The day of the month after which a payment counts as late.

Late — Paid after the due day.

Missed — Not paid for that period at all.

Standing — A member's status based on their payment record — often active, behind or suspended/voided. See when a member doesn't pay.

Closing a period — Marking everyone who didn't pay for a finished month as missed, so standings are accurate.

#Savings and shares

Savings — The part of a member's contributions the fund holds for them.

Share — A unit of ownership in the fund. Savings buy shares. See shares and dividends.

Share price — What one share costs in a given period.

Dividend — Income (mainly loan interest) shared out to members in proportion to their shares.

Bonus shares — Shares granted as a reward (for example for years of service), recorded with a reason.

#Loans

Loan product — A type of loan with its own rate, maximum term and amount. See running loans.

Principal — The amount borrowed.

Flat interest — Interest calculated on the original principal for the whole term. See flat vs reducing balance.

Reducing-balance interest — Interest calculated on the amount still owed.

Instalment — One scheduled repayment.

Repayment schedule — The list of instalments and due dates.

Arrears — The amount a borrower is behind their schedule.

Overdue — A loan with arrears.

Penalty — A charge for late repayment. See late loan repayments.

Default — When a borrower stops repaying and doesn't engage.

Write-off — Recording an unrecoverable loan as a loss in the books.

Guarantor — A person who agrees to cover a member's debt if they don't pay.

Credit score — A number summarising a member's reliability. See fair credit scoring.

Credit committee — Members who review loan applications and recommend decisions.

#Governance and records

Constitution — The group's written rules. See the constitution template.

AGM — Annual general meeting of all members. See running an AGM.

Signatory — A person authorised to approve withdrawals from the group's account.

Audit committee — Members who independently check the books. See the audit checklist.

Audit trail — A record of who changed what, and when, that can't be edited.

Reconciliation — Matching the books against bank and mobile money statements.

Double-entry bookkeeping — Recording every transaction as equal debits and credits. See double entry in plain English.

Journal — The list of all bookkeeping entries.

Trial balance — A list of all account balances; debits must equal credits.

Welfare reserve — Money set aside from premiums to pay welfare claims. See welfare packages.

Premium — The part of a contribution that funds welfare cover.

This guide is general information to help groups organise themselves. It isn't financial, tax or legal advice — rules for savings groups differ by country, so check with a qualified adviser for your situation.