Thrift collection popularly called ‘Ajo’ or ‘Esusu’ is probably the earliest form of banking. It is a special kind of micro finance banking business currently practiced in most neighborhoods and marketplaces. This kind of savings and (sometimes) loan business is very popular among communal dwellers. It is a business of trust and integrity and very few people have what it takes to be successful in thrift collection business. The business relies so much in number and it is extremely profitable. That is why I want to talk about it today.
Starting a Thrift Collection Business is very simple and down to earth. You do not need much investment, you may probably not need to rent any facility for it, all you need is your personal reputation, marketing ability, time, and consistency. If you have all these, you are perfectly good to go. Lets look at the potential profit and possible risks –
Profit Potential In Thrift Collection Business
This is a money business and as such, there is good profit in it if well managed.You don’t really make much profit from the business itself but from what you do with the money within the period the money is in your possession. So, if you are good at managing funds and you manage the money well, you will make a very good profit.
Traditionally, you take whatever amount the depositor is saving with you daily, you take one deposit out of the 30days in a month. At the end of the month, you pay the depositor 29days value and take one day value. This in itself is not a huge profit because, if you have 100 people saving N200 daily with you, your take home at the end of the month will be N200 x 100 = N20,000. This is not off the roof considering that you’d have to go out everyday to collect those funds.
Now, where is the profit? Like I said earlier, the profit is in what you do with the money you collected before paying it back to the owners. This is quite tricky and simple at the same time.
#First – Try to get most of your depositors to save from six months to one year, This is the strategy I used during my own time to get people to leave their funds with me for longer period of time. I did that by promising some incentives such as non-deduction and opportunity to get small loan based on the overall amount of savings.
#Secondly – Look for a very profitable, I mean extremely profitable business you can invest the funds collected into. You have to be very careful about this because business can be very tricky and risky sometimes. Do not put it in businesses that takes time to mature, business like grocery store in a very busy location or wholesale in any moving product is very ideal. This is where the profit will come from!
Risks Involved In Thrift Collection Business
1. Criminals – Like every money business, the danger of being attacked by robbers and hoodlums is always there, especially if you do collect large sum every day. You have to device means of conveying your money in a secure manner.
2. Friends and Family – Once they know you collect money on daily basis, they don’t want to know how delicate the fund is, they would
A thrift collector on duty
want you to use it in solving their own problems first. Some will come for loans and insist they will get it, after all, there is money in your hands. They will begin to come up withuseless business ideas hoping to finance it with the money you collect.
You need to be firm, extremely firm in your decisions never to borrow anyone from the money because if you do, then prepare to go to jail since it’s obvious they wouldn’t pay.
3. Lack of Self Discipline – You may as well be the greatest danger in your business. Once you have the money in your hands, you begin to dream big in the negative ways – you start engaging in frivolities, showing people you have arrived on top of people’s money.
Please if you know you lack self-discipline and proper management skills, do not disgrace yourself by going into thrift collection business. This business is exclusively for decent, well respected people.
4. Poor Decisions – You starts getting people’s money and you begin to think about unrealistic businesses. Invest only in business that is realistic and profitable, a business you have the time and knowledge to manage very effectively.
How To Setup Your Thrift Collection Business
Very simple! Probably the simplest business anyone can start but it requires hard work and good marketing skills. To get started, you need the following things in place:-
1. Record Cards – Sorry I have discarded all my cards, I’d have uploaded the picture for you to see but, if you have done anything with Ajo people before, you should know the type of card I’m talking about. It is the card given to the depositors, where the thrift collector used to record the payment made by the customer each day. If you haven’t seen it before, ask around you must see one or two persons who may give you the sample to see.
Print about two hundred copies or any number of prospective customers you think you can reach. Some people use to collect N50 from new customers before giving out the card, you may give yours for free as I did during my own time.
2. Cash Register – It is not just enough to register the money collected on the depositors record card, you need to register it on your cash register too. Every entry has to be accurate and signed by you on both record books
3. Sales Girls/Boys – Many have been maimed in this business by the sales girls/boys they hired. If you are to employ the service of sales persons who will be in charge of marketing and collecting the funds, you must hire from your family. Such person must be a close trusted family member with good track record. This business involves handling of money on daily basis, do not hire strangers to do this for you.
4. Business Cards – This is part of your marketing strategy. You need a business card you can hand out to potential costumers.
Start your marketing from people that know and trust you. Thrift collection business is a business that thrive on trust, you must do everything you can to win and keep people’s trust. Your family and friends are good way to start and gain the needed confidence, then you expand to the market women, okada riders, shop owners and workshops within your neighborhood.
If you are able to do all things and do it well, you can be rest assured that Osusu business is a business to reckon with.
