Three reasons why social savings groups are essential for increased crypto adoption in Africa

Saving is an important financial discipline in today’s world. But amid many competing interests for our disposable income, it requires a component of accountability. Small groups are ideal for this purpose. In the simplest essence of it, it’s easier for someone to keep you in check rather than consistently forgetting to save. Social savings groups will be crucial for crypto adoption in Africa to reach the next level. Here’s how to do it:

Financial competence

In a small savings group of five to ten people, it is easy to share ideas and information in a palatable way. Let us assume that these five friends are Alice, Bob, Catherine, Duncan and Esther. If they have similar social goals, they are likely to talk about how to achieve those goals. They will share relevant information to challenge each other as they look for the best ways to grow financially. The group of friends is a critical aspect of financial literacy because we tend to internalize the habits of those close to us.

If Catherine and Duncan happen to be financial experts, they can share more information about various investment tools. These tools can range from commodities and real estate investment trusts to crypto. If Duncan talks about his recent crypto investment in the group, four more people will have known about it. If they study it together, they will have a higher combined understanding than if either of them tried to understand crypto on their own.

In the financial industry, one of the limitations for spreading knowledge is that there is a limited number of accredited financial advisers. This also extends to the crypto industry. It is undoubtedly one of the biggest reasons why fraud continues to affect people. Small savings groups largely lack compliance with accredited financial information. However, they share practical financial insights. They are often safe places for people to ask questions about money. This, by extension, promotes economic growth faster than people can rely on working with accredited professionals.

Economic influence

Accumulating savings is as old as trade. If you can manage to save $1,000 in a small savings pool and have access to $5,000, that’s a valuable addition. Using the example of five friends, and say they save this much monthly, in a year they can accumulate $60,000 with consistent savings. In many social settings, such savings often go towards vacations and personal goals. Some are intentional about going into investments.

Personal judgment is quite difficult to quantify. In the context of the five friends, if one or two of the five consistently save, and one does not, an obligation conflict will arise. It is easy to expect someone to catch on to the operation of economic influence. However, personal motivations remain highly subjective. That is why social savings groups have both success stories and failures.

For those who understand financial leverage and are able to use social savings to grow their personal finances, it’s a solid advantage. Additionally, this benefit can be extended to close friends to learn or invest in appropriate financial tools.

Social responsibility

Given the volatile nature of human interests, accountability is essential to have. Using, again, the example of five friends, let’s assume that Esther is the most disciplined of the group. The hardest work to do in a group is to remind people why they are going in a certain direction. That will is tested socially and professionally. Savings groups begin in excitement, stagnate with inconsistency, and die down with a complete lack of will. The opportunity to save also competes against inflation and rising living costs.

Social responsibility entails support, motivation and a certain reward. There are great benefits to having mutually celebrated milestones among friends. Why is this so important for crypto adoption?

Social savings and crypto adoption

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, has during its 13 years grown through a vibrant international community. One person told the next about it, and that’s how the knowledge spread. Transactions continue to flow from one wallet address to the next. The subsequent growth of the crypto industry has been heavily dependent on groups of people coming together to support these projects. In Africa, small savings groups have a reach of at least 20 million people across the continent. A majority of people start saving informally before going formal.

In these social savings groups, people have improved each other’s quality of life. This can be seen in increased property ownership, higher quality of life and even additional capital for business operations. Many of them remain informal to accommodate members’ interests or life situations.

At their most basic level, they serve a need. In particular, there is the need for social support in personal economic growth. Mere knowledge of financial tools and investments, let alone crypto-assets is not enough to motivate someone to invest in them. Social support and motivation can fill that gap to bring more people into financial stability and eventual freedom through the value of the growing crypto industry.