The New York CaribNews - Turning to "Sou-Sou" to Finance Small Enterprises in New York

News Article

By Tony Best

It is a rare U.S. lawmaker who urges budding entrepreneurs to turn to legitimate but distinctly "non-traditional" Caribbean financial systems as a source of start-up capital.

So when U.S. Congresswoman Yvette Clarke, a New York Democrat, spoke in Brooklyn the other day about the importance of Caribbean entrepreneurs taking full advantage of the expected boom in the U.S. economy and mentioned the "sou-sou" or "SUSU" a Caribbean-American Chamber of Commerce and Industry networking session that focused attention on the growth of small business in New York, members of the audience perked up.

"We have to think outside of the box," said Clarke. "We have to repair what may be an error in our credit rating or we need to look to non-traditional lending opportunities as well."

An advocate of small business development in communities of color, the member of the House of Representatives explained that the U.S. Small Business Administration SBA didn't provide funds directly to small businesses, it guaranteed the loans that come from traditional financial institutions, such as the banks.

"And so we still have to go to the bank and the banks are still going to look at whether they can trust you to repay your loans. That can be subjective," said Clarke, daughter of Caribbean immigrant parents.

"So, we often have to work with credit unions as a way of repairing and strengthening ourselves financially if we are going to build a solid foundation for the growth of our businesses," she went on. "We need to look at non-traditional lending opportunities that existed in Caribbean communities ever since I was a child, probably before, the sou-sou. There is nothing wrong with the sou-sou and it works."

The sou-sou is a friendly cooperative savings scheme in which members of a small group of people contribute an equal sum of money every week or month to a trusted person who pays the funds to participants on a rotation basis. It has different names in different countries. For instance, it is called "esu" in the Bahamas while Guyanese refer to it as the "box," according to Dr. Richard Allsop's "Dictionary of Caribbean Usage." Jamaicans label it "pardner;" but Barbadians say the "meeting turn;" Trinidadians opt for "sou-sou;" and Belizeans describe theirs as "the syndicate."

Some experts and historians trace the system's roots to Africa, insisting the name is a Yoruba word,"eesu." But regardless of the label, the system is basically the same: a savings plan that relies on trust, honesty, a planned goal and determination to raise money in cases where there is limited access to bank funding. The "sou-sou" has been a fact of financial life in the Caribbean for more than a century.

Clarke, the top Democrat on a sub-committee on oversight of the House of Representatives Small Business Committee, said that both traditional and indigenous financial institutions must be used by people of color in the U.s., expecially those familiar with the SUSU. That's not all. She urged Caribbean entrepreneurs to join forces with the Chamber which she described as an effective community-based organization that was pointing people with dreams of opening businesses to secure financing. The Chamber, she declared, has an excellent track record of working to facilitate small business lending.

With only 1.7 per cent of SBA lending going to Black businesses, the Congresswoman, who is the daughter of Caribbean immigrant parents, said it was clear that minority and women-owned enterprises needed all the capital they can muster if they are to thrive.

Dr. Roy Hastick, CACCI's founder and president, who chaired the session and is quite familiar with the operations of credit unions, building ocieties and the sou-sou in and out of the Caribbean and New York said that his organization now in its 29th year of existence was moving ahead with the center-piece of its business agenda: a Caribbean trade and investment center in in Brooklyn. The City's Economic Development Corporation is expected to select a developer for the project in the next 60-90 days, he pointed out.

For his part, Brooklyn's new Borough President, Eric Adams, the session's host at the historic Borough Hall building said that trade and investment and the building of small enterprises were key to economic growth.

Karl Rodney, Carib News' publisher, said that the weekly paper had worked for decades to promote economic expansion in the Caribbean and to build bridges between the region and U.S., using its annual conference held in different countries as a vehicle to build links between large and middle=-size U.S. corporations, Caribbean governments and private sector institutions in the region.

"There is a financial vehicle, the new market tax credit, which our entrepreneurs should seek to use to help finance their enterprises," said Dr. Hastick.

New York Assembly Karim Camara, New York State Chairman of the Black, Puerto Rican and Asian legislative Caucus in Albany and New York City Councilmember Dr. Mathieu Eugene were among those who attended the function.

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