People across different communities in the UAE are joining in on a new practice, but you won’t read about it in the papers or see it on the news. The trend spreads through word of mouth from close friends or acquaintances. In Arabic, it is called the jamiyya, which literally translates as ‘the collective’. This activity involves a group of people, usually women, pooling their money as a source for an unofficial loan. Time Out spoke to some poolers to shed light on this burgeoning fad.
The concept is a very simple one. Let’s say there are five friends able to put aside Dhs1,000 a month, yet each one needs more than said amount at one time. Each month, all friends pool that amount, with one person having access to the total. The end result is that in five months, each friend will have access to Dhs5,000 at one point.
The amount of months this should go on will always be as many as the number of people involved and can go on as long as everyone in the group gets a chance at taking the pot equally.
We spoke to a teacher who has been doing the collective with her close friends for over two years. Preferring anonymity the teacher, known as S.A., highlights the benefits of joining such a group. ‘The amounts pooled can vary from Dhs500 up to Dhs10,000. Usually, women pool together Dhs2,000 and groups are typically six or seven strong. This means that at any one point, each woman will have access to Dhs12,000-Dhs14,000.’
Why is this method so popular? Often, the women that join the collectives do so because it guarantees them access to a significant sum of money at a certain time. Instead of borrowing that money from a bank where they would be subject to interest rates and various terms and conditions, they are able to access cash at a set juncture. The money could be used for things such as school tuition, buying home furniture or appliances, putting up a down payment for an automobile, or even for vacations. While the collective is usually entered into by housewives, there are some groups where men join in as well. The reason housewives are partaking in this activity is they’re usually in charge of planning the family household finances.
Although very appealing, the system is not without its flaws. ‘The most important thing to remember’, says S.A., ‘is making sure the people you enter into such an agreement with are reliable and trustworthy.’ Since the collective is ultimately an accord done outside of legal bounds, one would have no legal recourse to stand on should they be cheated. S.A. continues: ‘There are stories of some people taking the money and disappearing, although I have never experienced that. And since it is all a verbal agreement, you really have to be very careful’.
Being prudent is also the reason for the anonymity; S.A. tells us how she knows many women who will jump to join a group once they hear of it, even if they are not close with any of the members. On the other hand, some wives simply want to keep the borrowing and lending between trusted female friends.
Before going into such a collective, you should not only know the reliability of the other members but establish the order of payout ahead of time. The women will usually sit down and agree on the amount to
be invested, as well as setting up the order in which each lady gets the pot each month. Common practice dictates that the woman with the most pressing payment gets priority. The order should be recorded by all members so as to avoid potential confusions.
Ultimately, the collective practice is a great way for friends to access some money without having to go through official bank channels.
By exercising caution and common sense, you could find yourself involved in this new trend for years to come and solving some short-term money issues.
