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App brings age-old tradition of group saving to digital age

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Emirati entrepreneur, Heba Al Shehhi, says concept is simple to follow

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February 16, 2014 1:01 by



From the time she got her first salary, UAE-based Heba Al Shehhi has been saving small amounts of money each month, not in a bank, but with a collective group of friends. Often referred to as a ‘jam’iyya’ in Arabic, the concept is popular in the Middle East region and is a custom that has been passed down from generation to generation.

It’s a simple idea – a group of people agree on a set contribution each month (or week) and, at the end of the month, one individual receives the entire amount. The process continues until each group member has received the total saved amount once.

While it’s a popular practice, it’s not necessarily the most efficient of processes and that’s why Al Shehhi launched an app – Save Cycle – on January 22 to facilitate how it works.

Save Cycle is based on the financial concept of Rotating Savings and Credit Associations (ROSCAs) – a group of people that agree to meet for a particular time period to save and borrow together. This informal saving system is common in India, Pakistan, Indonesia and parts of Africa, in addition to the Middle East region.

She says: “[Usually], you need to remind people to pay or tell someone else that they will receive a particular amount at the end of a month. And, all of this is automated through the app.”

To get started, users need to invite their friends through email or text and then create a new ‘save cycle’. She says: “The app helps document everything and sends out reminders each month.” Payments, however, still need to be made through cash transactions that can happen during face-to-face meetings.

But, why is it so popular? “Because the headache of getting a loan from a bank, paying the interest and having an external entity follow up on you is more difficult,” explains Al Shehhi. “There’s flexibility between friends and sometimes we cover for each other (if someone is unable to pay one particular month). In fact, she says she was able to pay the down payment on her car as a result of one of these collective saving groups. According to her, the vast majority of Emiratis saves as part of a collective in one form or another. “It’s a social thing as well,” she adds.

Al Shehhi points out that the concept also has more to do with the deep-rooted trust that exists among friends and families. “I once met with a financial advisor from Ireland and he was surprised that we have this kind of financial culture, because they don’t have the same trust that we have on our friends and families. He said he wouldn’t be able to trust his friends with his money.”

The app is currently available on Apple’s App Store. Al Shehhi also has plans to release a version for Android and BlackBerry.



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