Money circle has been around for ages with under different names depending on where you are from. Indeed, it is a common practice among Caribbean and African immigrants as a way to help their businesses grow. But, it is also widely available among other communities as well. Yet, as with any legitimate operation, there is also an illegal money circle scheme.
What Is A Money Circle? A.K.A Lending Club
If like many you were invited by a person to join a money circle or a sou-sou, susu, blessing loom, or gifting circle. But you are not sure about the legality. Use the following pointers.
How Money Circles Transform Lives
Follow this simple steps
- People you trust
At the core of the principle, money circles bring people together for a common cause. But, the key pointer here is people you know and trust. That is why it takes a while to join some money circles. Because all members need to follow a process.
- The number of people
If a circle goes beyond a certain number of people, you should run away. That is because it is a circle, each person gets their own turn. So if the circle meets every month a circle of more than 12 people is a red flag. If the circle meets every week, a circle of more than 52 members red flags, and so on.
- Quick pay out
Typically, during the first circle meeting, everybody is present and you all agree on the rule and constitution of the circle. Then each person waits for his own term. Don’t ever accept money to invite a person to join a circle. In a typical scam, new members are lured with the promise of a large cash payout (at least $10,000) after they invest a hefty entry fee (at least $1,000) and recruit new members. The illegal cycle only continues if new recruit.
- Virtual
Normally, a circle requires members to meet physically at a pre-agreed date and time. Be aware of any offer to join an online money circle scheme that promises you will make money by paying online.
- Purpose
Money circles have a purpose and it goes beyond just the monetary aspects. That is why members know each other so well. Or in case it is run by a well-established organization the goal is to help build or rebuild your credit score.
