Porirua Wealth PoolProjects
The Porirua Wealth Pool has been our response to the way that many people in our community get trapped into cycles of poverty and disadvantage.
We wanted to create some infrastructure which our Porirua East community can use to keep control over their finances and push past the more common models of dependence.
The Wealth Pool might feel like a very foreign idea to most of us, it’s outside what we are normally encouraged to do and requires a lot of trust and openness. This kind of openness isn’t usually encouraged with money and can take a while to get used to.
We had a lot of questions about how the Wealth Pool would work when we first came to the idea, but at Wesley we learn by doing. This resource aims to share with you what we have tried and found.
What does it look like for a group of people in a community like Cannons Creek to save and loan money together?
A group of us who live or work in this community (and a couple of others who want to be a part of this kaupapa) and who all know each other, come together to save. Between us we build up a pool of money so that we experience the power of having savings for emergencies, but also so that we can then lend to each other.
Savings pools or mutual aid schemes are a common practice in many cultures and families, but we didn't know too much about them before we started.
A savings pool is a way that people can save collectively, borrow and lend money without having to pay interest.
Saving is fundamental to the pool
We are focused on creating a space were people feel like they can save. For those of us on lower incomes or unstable working conditions, saving can feel unachievable, especially when it feels like we have so much going on in our day-to-day lives. Saving together can feel more encouraging and reassuring, seeing other people doing it reminds us that it is possible for us too.
Loaning to each other helps us make sure our money is working to do good stuff
So far we have managed to help each other do lots of good things including:
- buying new cars or fixing old ones
- getting out of debt
- attending tangi
- taking holidays
- fixing furniture
- changing doctors to get better support (paying off a bill at the old doctor)
- paying bond on a new flat
- filling the cupboard and fridge
The Wealth Pool cuts out any outsider lenders or credit organisations that would otherwise put us in difficult positions or push us deeper into cycles of debt. Loans are interest free, but the calcluations are done so that by the time someone has paid back their loan they will also have contributed the same amount to their savings. They agree to leave their savings in the Pool for the amount of time it takes to pay back their loan, so that money can be borrowed by others and be put to good use.
The financial details such as loan contracts and monthly statements keeping track of savings, loans, repayments are managed by an independent person. We have all learnt much from Living Economies who administer many savings pools around the country.
It’s important to note that Te Hiko and Wesley aren’t in control of the Wealth Pool and aren’t holding any funds or lending any money.
The organisation provides some staff time to facilitation of the pool processes and kōrero, but the decisions and lending is done person to person with members of the pool as private individuals. We aren’t a lending service and don’t advertise ourselves as such. We are a group of people who are working together. We are sharing what we have learnt here in case others want to start their own pools. For more details information about what a savings pool is see the Living economies resources. They have been an invaluable support to us!
Like any of our mahi - how we work is as important as what we do
The Wealth Pool wouldn’t be able to run without these core values, which help make our lenders and borrowers comfortable.
We see the Wealth Pool as a piece of infrastructure which can help build prosperity in Porirua East, we know that the dominant models aren’t working for us and over time have meant that we have been drained of resources and capital. The Wealth Pool is one way to build those resources back.
- Self determination
We want people to feel in control of their own money, rather than having to answer to outside organisations, which aren’t looking out for our interests. Having savings also allows us to be able to have more security in situations that pop up unexpectedly and frees up some options for us. It is an empowering feeling knowing that we have something to fall back on and don’t have to rely on organisations which can leave us feeling worse off than when we went to them for help.
Trust is a fundamental part of the Wealth Pool since we are borrowing money from each other. Building relationships between Pool members is so important for us to be able to trust each other with our savings. Making new and meaningful connections in the community is another benefit of the Wealth Pool, outside of saving!
We are part of the Pool both to help ourselves with saving money and needing a loan, but in turn we want to help each other out, being able to help people in our community and make their lives a little bit better is a rewarding feeling.
Honesty is an important part of the Wealth Pool. We need to be able to have open conversations about money for the Wealth Pool to work, which is an adjustment for a lot of people.
- Responsibility to one another
As part of a group, we have to think about how our actions impact everyone else. We need to act with care and consideration as a part of the Wealth Pool. We make sure that we protect everyone’s information.
For us at Te Hiko, these alternative economies are essential in thinking about how we can restore mana and capital back to Porirua East. For years, this community has been depleted of resources, leaving many people vulnerable and stretched just getting by. Money has been drained from Eastern Porirua through cycles of debt and poverty.
But while money might be scarce sometimes, there is much other wealth. The Wealth Pool encourages saving over borrowing and recognises the impact which money can have on our wellbeing, physically and emotionally. It is about building resiliency, and feeling able to bounce back from unexpected finances, rather than stuck and unencouraged.
We're trying to plug the drain and keep money flowing and working in the community
One of our goals is to slow down the flow of money out of the community through other credit and lending organisations, like third tier lenders, and provide an alternative option that supports savings and reciprocity, and builds resilience.
The Wealth Pool builds on the kaupapa of Good Cents, creating some excitement and empowerment around having a ‘stash of cash’ in emergencies, or for moving forward with projects, such as buying a car or going on holiday.
You can look at the Te Hiko Theory of Change if you are interested in reading more about this.
Getting started was hard
When we held hui to introduce the idea, to see who would be interested in starting a savings pool, lots of people said “ It’s a really great idea, but I don’t know anyone who will join with me”. As the Te Hiko team, we thought it might be easier for people to join an existing pool rather than start their own, and maybe we should try starting one.
The pool is now four years old, and has 31 saving members
We are Porirua East residents, kaimahi at Wesley, Good Cents graduates, and others who we have relationships with and who are interested in this kaupapa.
We all find it pretty cool to be a part of such a diverse bunch of people having some of the realistic kōrero we have ever had about money. We look after each other carefully to make sure we can keep learning well together.
In the Te Hiko whānau: How is this contributing to growing better economic systems and adding value in our communities?
We believe that we can support each other in several ways.
Firstly we can help each other out by making our money work - instead of sitting in the bank, it can get out and do things for people in the community. Secondly, we can help each other learn and connect and practice having complex and difficult conversations. Practicing in this way will help all of us when other issues come up in the community that we need to have open kōrero about.
Because we have a group that is made up of staff and community, but where we are sharing actual money, we are breaking down barriers of 'them' and 'us' and all working as real people to support each other and learn together.
We are also learning a lot about how to take an idea that works elsewhere and shape and mould it to one particular community - it is testing an idea that we weren't sure would take off, and working out what needs to change to work well in this community.