Savings And Social Solidarity With Likelemba

Starting and maintaining a savings account is difficult at the best of times. Sudden unplanned expenditures, economic down turns and other financial situations can easily eat into or flat out remove your savings. Many people who try to improve their financial situations are usually trapped in a cycle of poverty. This is where the idea of a Likilemba possibly first originated. It is a form of community saving. Through social solidarity, a Likelemba can take people out of poverty and give them the freedom to obtain financial freedom.

Likelemba originated in Africa. The members of the Likelemba all put a small amount of money in a pot. Every month, one member is awarded the total pot. The more members in the Likilemba, the smaller each member’s contribution to the pot and the less impact the monthly Likelemba deposit will affect each member. The Likelemba is most effective when each member uses the lump sum they receive to invest or start a business enterprise. The idea being that you use your first lump sum to negate the monthly deposits you are required to make. A likelemba is simple and easy to use and requires very little other than committed members.

The Benefits Of A Likelemba

When you are part of the Likelemba, the peer pressure will serve as incentive for you to save. If the pooled money is invested, it will result in better interest rates than if each individual saved their small single contribution. Another great benefit of a Likelemba is the sense of community that is generated by joining one, especially if the Likelemba members meet regularly. Socializing with your other members cements the group’s relationships and goals. Likelembas also can share investment and business knowledge among members and in this fashion develops skills among members. When members know when they will receive their financial windfall, it makes it easier to plan your financial future. If members do not have access to banking facilities, a Likelemba is a great way to keep finances safe since the money isn’t kept in one place for extended periods of time.

Formalizing The Likelemba

A Likelemba is by design informal but it is more powerful when there are some formalized ideals in the Likelemba. A Few things that can be contained in this Likelemba constitution can include the objectives of the Likelemba as well as the structure of the club. It can also be helpful to set out responsibilities or duties for each member of the Likelemba. It can also be helpful to set out what each monthly contribution should be. A committee can also be setup that manages the Likelemba’s finances.

The Different Types of Likelemba

Likelembas can have a rotational payout or can have the payout attached to specific events, for instance a great way to cover funeral costs would be through a Likelemba. A Likelemba can also be used for a purchase of high value items that will benefit the entire Likelemba group or generate income for the group. Likelembas can also be used as an investment group where the monthly pot gets put into an investment and interest is paid out to members