The Life-Saving Committees - published in Review, Dawn on 21st August 2008

By Afia Mansoor

As the cost of living continues to shoot up and so does the desire for a better lifestyle, people find it harder to fund their aspirations. The plethora of loan options, after drying peoples’ wallets, demands a pound of their flesh as they struggle to pay back. The committee therefore stands up as the no-risk, no-interest option to save money.

Committee money is utilised by people in different ways. For some it is a means to splurge on a one-time indulgence, like a vacation. For others it is a way to achieve long-term goals.

Lubna, a middle aged lady, stitches clothes for women in her locality. Her husband retired early from the air force and her daughter works for an electronics company while her son goes to primary school. She has been using her earnings as a tailor to invest in committees. Currently, she is pooling money in a committee for Rs3,000 a month, the duration of which is 20 months. With the Rs60,000 that she will get, she plans to shop for her daughter’s wedding and do up her house.

She elaborates, “I use the committee money for redoing the house and paying off my dues to various people. I have utilised this money to lay new flooring in the house, make wooden cabinets for the kitchen and the living room. One such committee fund helped me make two rooms upstairs which I will eventually build into an independent portion and give off on rent.”

Rukhsana, aged 24, has recently married and taken a break from her work as a maid. While it was difficult to make ends meet with her monthly earnings from working in seven houses in a day, Rukhsana and her mother managed to pool Rs500 per month for a committee and ended up paying their debts with it. Rukhsana’s elder sister was married off with a small dowry that was collected by some of the women who employed her and partly financed by the pool money. She is a great advocate of committees and feels it is impossible to collect amounts like Rs10,000 otherwise.

Shazia aged 36, teaches at a college and has recently started pooling money in a committee. She says, “The idea of having to contribute even after getting your total pool (in order to complete the total amount of contribution by each group member) was what had put me off committees; I used to think it’s better to save your own money in a bank. However, committees are useful when you want a large fund urgently. The advantage is that you can convince your pool partners and get your share in the month when you genuinely need it. You can also split the committee with a friend so you both pay half the monthly amount and get half the share. For instance, if the total pool money is Rs50,000 and each member has to pay Rs2,000, you could pay a monthly contribution of half the amount with a friend paying the other half and get Rs25,000 as your share.” Samina is planning to use her Rs100,000 pool money to help pay for a plot she and her husband have bought recently.

Zainab, aged 60, is a housewife who has been pooling money in committees since the past two years. She says, “The utilisation of the committee money depends on how much people can afford to set aside for the monthly contribution. If you pool in small amounts you will obviously get a small total pool and utilise it for small expenditures. People pooling in larger amounts usually use the money to buy property, jewellery or dowry items or renovating homes.” The last committee pool that she received helped to pay for Zainab’s grandson’s birthday arrangements. She plans to use the next pool for repairing her double storey house’s roof.

Tariq, an executive, aged 32, has started pooling money through his mother’s circle of committee members. He believes pool money is a great respite from the interest based options available through credit cards. He says, “I had once used my credit cards to pay for some expenses incurred during my sister’s wedding. It has been almost three years and I am still paying the interest on the paltry sum I had used. I will now pay the whole amount off with the committee money that I get and kiss my credit card goodbye. Had I originally bought the stuff with committee money I would not have had to pay so much as interest.”