Opening a bank or mobile money account for your group fund

Nothing protects a group fund more than where the money sits. Most losses in savings groups don't come from bad loans. They come from money kept in one member's personal account, where it gets mixed up, borrowed "temporarily" or lost when that person leaves. This guide covers how to set up a proper group account.

#Choose the right kind of account

Bank account in the group's name. This is the strongest option. Withdrawals need the agreed signatories, and statements provide an independent record. Many banks have products for associations, clubs, stokvels or chamas, often with low fees.

Mobile money business or merchant wallet. This is convenient for collecting dues, because members pay a short code or till number instead of a personal number. Check whether the provider supports multiple approvers for withdrawals. If it doesn't, sweep the balance to the bank account regularly. Our guide to collecting dues with mobile money covers collection in detail.

The common, safest setup: collect through a mobile money business wallet, then move funds each week to a bank account with dual signatories. Pay out loans and welfare from the bank account.

#The signatory mandate

The mandate is the instruction to the bank about who can authorise payments. The usual structure is:

• three signatories, typically the chair, the treasurer and the secretary or another trustee;
• any two to sign every withdrawal or transfer;
• not two people from the same household;
• a rule in your constitution that the mandate can only change by a resolution of members or the committee.

Write the mandate into your constitution, and record it in the minutes of the meeting that approved it.

#Documents banks typically ask for

Requirements vary by bank and country, but expect some of:

1. the group's constitution or bylaws, signed;
2. minutes of a meeting resolving to open the account and naming the signatories;
3. IDs and proof of address for each signatory;
4. a registration certificate, if the group is registered (see should you register your group fund?);
5. an initial deposit.

Call two or three banks first and ask for their checklist. Requirements, fees and minimum balances differ a lot.

#Rules that keep the account safe

• No personal use, ever, not even a short-term loan to a signatory.
• Every withdrawal has a paper trail: an approved loan, a welfare decision or an invoice, recorded before the money moves.
• Statements go to more than one person. Ideally, a non-signatory committee member receives the monthly statement directly and checks it.
• Reconcile monthly. Match every deposit to a member and every withdrawal to an approval. See reconciling mobile money statements.
• Update the mandate promptly when officers change, and don't let an outgoing treasurer keep signing rights.

#What about cash?

If some members pay in cash, deposit it quickly, preferably the same or next day, and never let it pile up at someone's house. Our guide to handling cash contributions safely has a step-by-step routine.

#Checklist

• Account in the group's name, not a person's
• Three signatories, any two to sign
• Mandate recorded in the constitution and minutes
• Mobile money wallet swept to the bank regularly
• Monthly statement reviewed by a non-signatory
• Monthly reconciliation signed off

These controls are also the core of preventing fraud in group funds. Get them right at the start and most problems never happen.

Frequently asked questions

How many signatories should a group account have?

Three signatories with any two required to approve a withdrawal is the most common setup. It stops one person acting alone and still works when someone is travelling.

Can the treasurer be a signatory?

Yes, but the treasurer should never be able to withdraw alone. Pair the treasurer with the chair or another officer.

Can we just use the treasurer's mobile money number?

It's common but risky. The money legally belongs to the account holder, gets mixed with personal funds, and is lost from view if the treasurer leaves or dies. Use a dedicated group wallet or bank account.

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.