1.Traditional Rotating Fund
Communities around the world use rotating funds. Rotating funds enable members to save quickly for amounts that can be hard to achieve on their own.
How it works:
- every week or month everyone in the group contributes to the common fund
- every week or month one person takes the whole pot
- continues until everyone has received the whole amount once
Who gets the pot is usually decided by lottery or negotiation: for example, if someone in the group needs money suddenly, they may ask to have their turn first or on a certain date.
"Hands" variation: members can pay in multiples of a standard amount, sometimes called "hands". For example, a group may decide to have a "hand" of £20. Each member can put in one hand or multiple hands as long as they do this every week or month. The member will receive the whole pot on rotation once for every hand they put in. Someone paying in 4 "hands" worth every month will receive the whole 4 times over duration of the fund and someone putting in 1 hand per month will receive once.
2.Food Cooperatives
There are dozens of food cooperatives already using Kin. They are a great way to make savings, eat better and build community. Kin Cooperative is working with Cooperation Town to support neighbourhood food cooperatives across the UK.
How it works:
- members contribute a weekly amount (usually around £5)
- one member (the treasurer) requests money every time an order is made to pay for the food purchase
- food is delivered and divided among the members as agreed
If there is money left over, this can build up towards a bigger order later on or for a community party or can be divided back to the members.
3.Freelance Christmas Fund
Sometimes called "bread funds", groups of freelancers all over the world have created savings clubs to help them manage sudden losses of income. Many self-employed people do not receive holiday pay or sick pay and Christmas can also be a time where there is less work and less income. Starting a savings club with people in the same situation can help you create strong savings habits and a safety net.
How it works:
- members pay in as much and as often as they think appropriate
- when they need their funds, they request the amount from the group
Usually members can only request what they have put in but some groups may decide to create a solidarity fund as well to help newer members especially if they are saving more than they are requesting.
4.Traditional Accumulating Fund (2 kinds)
Accumulating funds are also common all over the world. They tend to come in two variations:
- Community Purchase
- Interest Free Loan Fund
Community Purchase: is when neighbours, friends or family save together to purchase something that will benefit them all or to support a common cause. They usually contribute equally or by an agreed formula - "each according to their means".
Interest Free Savings and Loan Fund: is when members effectively allow their savings to be available to oters in the group on the basis that they will pay it back.
- everyone in the group commits to contribute to the common savings fund. It can be every day, week or month, it can be the same amount for all the members or different amounts depending on how the group decides members can access the funds (on kin group pages you can always see the total each member has contributed and requested).
- a member requests a loan and explains how they will pay it back. The group agrees to make the loan.
- the member pays back the loan over the agreed period.
Secure variation: some groups may choose to create an additional savings pot to "secure" the loans. Usually this would involve contributing regular smaller amounts on the basis that they should equally carry the burden if a group member fails to pay back money they owe. In this way the security fund is not interest attached to the loan itself and the fund remains halal.
Got ideas?
There are thousands of reasons to engage in financial mutual aid. You can also use a kin group for more than one thing at the same time because kin allows you to track how much everyone in your group has contributed and received.
If you want to discuss an idea with us, WhatsApp Kin (faster) or contact Kin. We're always excited to work with you!