[GlassOwAter]

Interesting read. I was only familiar with a bastardization that goes by the same name. An ex is from Liberia and while her mom now lives in the states she still sends money to contribute to a tontine.

They pool their money together and then rotate who it all goes to every month or some pet period.

Sounds like a scam run on the financially illiterate.

https://www.modernghana.com/news/772009/tontine-microcredit-...

[mapt]

These are two very different systems. It's interesting that they ended up sharing a name in different locales.

Usually "Tontine" is used for a retirement plan that people pay into, which distributes the dividends evenly among the surviving cohort of investors; The last survivor gets the whole pot of investment. They fell into disrepute in small part for having salacious incentives to murder each other as the number of survivors drops, but mostly for being in competition with life insurance, pension, mutual funds, and later tax-incentive-investment-account models that ended up being more favored by governments & finance.

What you're describing is what I know as a 'tanda'.

https://en.wikipedia.org/wiki/Rotating_savings_and_credit_as...

https://en.wikipedia.org/wiki/Tanda_(informal_loan_club)

[rundmc]

There are versions of this 'ROSCA' Tontine in most countries and continents in the world. In the past when formed among strangers they have proven to be super susceptible to scams.

Where they work is when each member of the group is known to each other and therefore would lose social status by defaulting on their obligations.

The benefit of these arrangements when run properly is that instead of saving $10 per month and after a year having the $120 to buy a productive asset (let's say a cow), they can get the $120 up front from the Tontine and pay the money back to the community group out of the earnings from the milk etc.

The persistance of these schemes everywhere indicates that this is a valuable means for the less well off to gain access to lump sum amounts for purchases without paying interest. Not everyone will be happy about the last part of course.

[mapt]

Tandas / ROSCAs are useful savings vehicles when it is, for whatever reason, difficult to hold on to money for very long. There's the physical version of this (The local warlord regularly mirks people for their wallets; Or maybe your government has something called 'civil asset forfeiture'), the social version ("The husband with shared access to my accounts drinks it all away!") but also the investment / monetary version where you have limited legal investment opportunities ('Peasants aren't allowed in the stock market'), or you have hyperinflation and so have to deal with the complication of a constantly shifting dollar. The money doesn't need to dwell any place for long periods of time, it's collected and distributed and then _spent_ on an expensive non-divisible improvement to your life immediately.

I play a survival game called Rust. Progress is meted out through the slow accumulation of Scrap, which is spent on learning technologies. People constantly kill each other, and those who are ahead on tech tend to accrue advantages in combat. There is no "Bank", and no guarantee of the ability to set up a minimum viable base to store your resources. One of the most pathetic strategies to resort to on the busiest most crowded servers, when you're a few days behind, is to linger around the edges of a safe zone collecting small amounts of Scrap(dying every few minutes), literally play roulette with it at the in-game gambling system in the safe zone at 1:20 odds, and when you eventually win big, use your scrap to progress through the tech tree; It might be 1000 scrap to get your tech to where it needs to be to compete, and you might average 50 (w/ Std dev of 25) scrap between deaths, but you'll get there eventually in this way, whereas the non-gambler needs incredible luck (+38 standard deviations of success) to actually progress through this high price threshold.

A typical tanda removes the random chance element, but preserves the "Eventually you'll get there" element even while holding on to no money.

[skort]

What exactly is the scam? That someone isn’t extracting profits?