How a hagbad (ayuuto) works, and how to run one fairly
A hagbad, also called an ayuuto, is the rotating savings group of Somali communities: in Somalia and Somaliland, Djibouti, the Somali Region of Ethiopia, Kenya (for example Eastleigh in Nairobi and the North Eastern region) and the diaspora in the UK, the United States, Canada, Sweden, Norway and the Gulf. Each member pays the same amount on a fixed schedule, and each round one member receives the whole pot, until everyone has had their turn.
In English, hagbad and ayuuto both mean a rotating savings club, which economists call a rotating savings and credit association (ROSCA). Members take turns receiving the pot; nobody pays or earns interest.
The two words mean the same thing, and people use them interchangeably. Ayuuto comes from the Italian word “aiuto”, meaning help. A group that pays every month is often called a hagbad bileed, a monthly hagbad.
There is no interest (ribo). A member with an early turn gets a lump sum up front and pays it back through later contributions; a member with a late turn is simply saving. That is one reason the hagbad is valued: it lets people save together for a wedding, school fees or Hajj without borrowing.
How does a hagbad work?
- An organizer, in Somali guddoomiyaha hagbadda or maamulaha ayuutada, brings together people who trust each other, usually relatives, neighbours, co-workers or friends. The group agrees the amount, how often everyone pays and how many rounds there will be.
- Each member has a share, a lug, which is also their turn to receive. The order of turns is the kala horreynta lugaha.
- Every round each member pays the organizer, in cash, by bank transfer or by mobile money.
- The organizer hands the whole pot to the member whose lug has come up, and the hagbad ends when every lug has been paid out.
Many organizers keep the record in a notebook or in a WhatsApp group: who paid each round, who has received the pot and who is next.
What does a hagbad organizer do?
The organizer collects each member’s payment on time, hands the pot to the right person, and keeps the record everyone relies on. When someone is late, it is the organizer who has to ask, politely, without spoiling the friendship. It is work built on trust, so the organizer benefits most from a record that shows clearly who paid what, and when.
How is the order of turns decided?
Groups do it in different ways. Some draw lots. Others agree the order together, often by need, so a member facing a big expense goes first. Ordering by need is common in ayuuto groups, but it can leave someone feeling pushed to the back: one member of a Somali online forum described being put last because the group decided they didn’t need the money as much as the others.
No method is wrong if everyone agrees to it. What matters is agreeing the order openly before the first payment, writing it down where every member can see it, and recording any swap between two members.
How does a hagbad work abroad?
In the diaspora, members of one hagbad may live in different cities, or even different countries. They often pay by bank transfer or mobile money instead of cash, and keep in touch in a WhatsApp group. That makes it easy to join in from far away, but it also means payments end up scattered across bank apps, mobile money messages and chat threads. The group should agree one amount, one payment day and one person who keeps the record.
What goes wrong in a hagbad?
- A member stops paying after receiving the pot. The members with later turns lose out, which is why groups start with people they know and trust.
- Arguments about the order. If the order was set by need without a clear agreement, or by a draw nobody can check, members with late turns may feel it was unfair.
- Records spread across phones. When payments are only in a notebook, mobile money messages and a WhatsApp group, it is hard to agree months later who paid which round.
- Doubts about the organizer. The organizer collects everyone’s money each round, so members need to trust both the person and the record. A clear, dated record protects the organizer as much as the members.
How do you run a hagbad with Savings Circle?
- Create the group. Choose a name type such as “Savings circle” and give the group any name you like, for example “Family hagbad”. Then set what each person pays per round and the schedule.
- Add members from your contacts. They don’t install anything.
- Set the order. Run a random draw in front of everyone, or enter the order you agreed. A random draw saves its seed, so anyone can check later that it wasn’t changed. Members can ask to swap turns, and the swap is recorded too.
- Record payments as they come in, by cash, bank or mobile money, with a screenshot as proof if you like. It works offline and syncs later.
- Remind the late ones. One tap opens WhatsApp, SMS or Telegram with a polite message.
- Record each payout. Every entry is dated. A correction is added as a new entry, and the original stays in the history. Receipts and statements show each member what they have paid.
It is your hagbad register on your phone, with a web app for when you work on a computer. Savings Circle never holds or moves money. Members pay the organizer the way they already do; the app is the shared record of who paid, who is next and what is owed.
Other names for the same idea
In Somali it is a hagbad or ayuuto. In Ethiopia and Eritrea the same system is an equb (እቁብ), and in Egypt and the Gulf a jam’iya. Elsewhere it is a committee in Pakistan and India, a tanda in Mexico, a susu in Ghana, a chama in Kenya, an arisan in Indonesia and a paluwagan in the Philippines. Economists call all of these rotating savings groups, or ROSCAs. Savings Circle works for any of them.
What is ayuuto?
Ayuuto is the Somali word for a hagbad, the rotating savings group Somali families use in Somalia and the diaspora. In English the two words mean the same thing: members pay the same amount on a fixed schedule, and each round one member receives the whole pot until everyone has had a turn.
Guides
- South Asia: committee, kameti, chit fund, bhishi, kitty party and samity
- Africa: susu, chama, ajo, adashe, equb, hagbad, stokvel, tontine, mukando and chilimba
- The Americas and the Caribbean: sou-sou, tanda, junta, lending circle and pardner
- Asia and the Pacific: arisan, paluwagan and hụi
- The Arab world: jam’iya