Thirty years ago, Balgiisa’s mother fled from Somalia to the UK via the Netherlands, where Balgiisa was born. Growing up in Birmingham, Balgiisa wanted to study for a career in Law but her family couldn’t afford the fees. Balgiisa’s mother knew what to do. She put the word out to her community and started a Hagbad, the Somalian version of a savings club.
Within a few weeks her ‘aunties’ had pooled enough money to send Balgiisa to law school. She is now Head of Law and Criminology at Northeastern University London and a founding member of Kin Co-op. Balgiisa’s success was her community’s success, and what’s more, each of her aunties also benefited by the same amount, continuing to pool money until everyone had an equal and substantial pay out without a penny of interest.
Hagbad, ayuuto, passanaku, susus, tandas, pardners or ROSCAs – there are names for these clubs in hundreds of languages used by communities thousands of miles apart. The name often translates as ‘gathering’ or, in the case of hagbad, simply as ‘help’. They are an essential form of co-operation with the potential to transform communities by granting access to larger amounts of interest-free money and creating valuable trust bonds between community members. It can be hard to save money by oneself and, like when an old fridge stops working, it isn’t always possible to predict when we need larger amounts of money that we don’t have. It is at these times that we are most vulnerable to predatory lending. If widespread and commonly used, a social network of savings clubs could effectively wipe out the pay-day loan market, where the average sum fluctuates between £500-£1000 and interest can be higher than 2000%. In the UK, some cash pardnas have been running for decades in Black and Asian communities, who were first sought by the UK government to join the workforce but denied access to bank accounts because of the colour of their skin.
Kin Co-op was founded with a vision to transform the financial structures that underpin our unequal and exploitative economic system today. We are already developing a platform to allow groups of friends, neighbours, and colleagues to pool money together in financial mutual aid clubs called “kins”. They can be operated like a hagbad or to collectively fund a particular goal, like a community solar array, and countless uses in between.
But it would be too simple to say that financial mutual aid will change the economic system, no matter how ubiquitous and exciting the movement might become. What it can do is strengthen bonds between people and awaken ties of co-operation that are deeper and simpler than the ones that drive businesses and housing groups from the fast, cheap stamp of Companies House to the more laborious path of becoming a regulated society. Mutual aid may be a gateway but to transform our globally-intertwined economies – to take them back from the handful of private equity firms and tech platforms that dominate our work, education and recreation time – demands new forms of co-operation on every level of society and that will require significant and sustainable investment in co-operatives and scalable, open source co-operative innovation.
That is why the Kin team is working with partners to establish a new co-operative mutual aid organisation because co-operatives, like friends and neighbours, can hugely benefit from pooling money and resources together.
In April, I travelled the “co-op camino” to Mondragón in the Spanish Basque Country, studying how it grew to be one of the largest co-operative federations in Europe. The financial union was one of the first parts to be developed, with every co-operative business and member in the group required to use its services at one time. It helped to bring the community together because now when one was suffering or succeeding, all were suffering or succeeding – everyone had “skin in the game”. The financial union lent money to the community and member co-operatives which helped the federation grow and made the whole valley prosper and feel common ownership over their successes. At a time when the Franco dictatorship refused co-operators the state pension, the co-ops, used to pooling resources, created their own social security system. There is a joke today that you can be born in Mondragón, go to the co-op schools and co-op university, work in a co-op and die in a co-op residential home. And yet the co-operative spirit of the Mondragon Corporation seems confined to the valley it was born and grew up in – the Basque Country is broadly capitalist and the co-operatives are locked in competition with global capitalist businesses.
On one of the university campuses in Aretxabaleta, I met Arianne, a faculty member and worker from Coop57, a younger, decentralised investment fund operating across Spain with over 5000 public investors and 2000 co-operatives and social enterprises. Hearing Arianne speak about the funded groups – anarchist bookstores, women-owned migration centres, schools, housing co-ops and more – it was apparent that a lot of them wouldn’t exist if it weren’t for Coop57. Unlike Mondragón, Coop57 has a systemic agenda that transcends geography. Each region (Aragon, Euskal Herria, Galicia, Andalusia, Catalonia, Madrid) has its own coordinating committees, and these committees together elect the governing council of Coop57. This structure takes advantage of covering several regions across the country while understanding that local communities know best about the needs and realities of their local economies. By being open to the public to invest they made it possible for many more people to be involved in the co-operative movement.
Back in the UK, co-operatives were telling me the same things: “if we had the capital, we could be expanding”; “we don’t have capacity for marketing so no one knows we exist – but if they knew, they’d choose us over the alternative”; “we can’t borrow like capitalist businesses, we need a holistic approach”. Legislation has become tighter over the last half-century, credit unions can only lend limited amounts to corporate bodies and need significant reserves to make an impact. It’s hard to get loans at rates that work for co-operative models, which can be slower to build, and relying on grants is often labour intensive and unsustainable. What can the UK learn from the financial and other forms of co-operation modelled by the Mondragon Corporation and Coop57, as well as Legacoop in Italy, Shared Capital and Seed Commons in the US, and those we have here in the UK?
It was hot on August 9th when a handful of co-operators met online to hear the proposal for a new mutual aid organisation. Zooming in from Space4 in Finsbury Park, we started discussing the questions that we would need to answer: how will it be governed, will member co-ops make mandatory or voluntary contributions, will it focus on certain sectors or criteria, what legal structure will it need to take, what are our next steps?
Volunteers from the different co-operatives are now developing a proposal for this new co-operative mutual aid and savings club. One of Kin’s goals is to bring personal savings clubs and large-scale co-operative funding together in an easy-to-use ecosystem, creating an ethical financial movement that can grow broad and resilient, helping anyone to invest directly in their communities; each growing and benefitting with their communities. That’s what kin means. It will look nothing like a bank.
Elinor Ostrom earned a Nobel Prize studying autonomous community water management systems, some of which have survived for centuries, many springing up when systemic issues and mismanagement were about to bring disaster. Money can also be imagined and managed as a commons and, like water, increases total productivity when distributed fairly to achieve the greatest coverage. Instead, we are on the eve of a disaster that is affecting every common resource because money is concentrated among those who already have it and control access to it. Capitalism is a crisis of irrigation.
In the end, this is what ethical investing must mean: transforming how we imagine and use this fundamental common resource, money. Ethical finance should be synonymous with investing in co-operatives and community-owned organisations, supporting a transformation of labour and ownership. As long as the financial incentive driving shareholder-owned corporations to extract, exploit, and tighten margins regardless of the social and ecological impact remains, there can be no real transition towards an ecologically sustainable economy. Today, financial structures drive global inequalities and conflict and channel money away from communities. We need to change the flow, and that means building new structures together.
If you would like to find out more about the co-operative mutual aid organisation or get involved in development, please get in touch.
Rob Callender is a co-founder of Kin Co-operative, currently studying a Masters at Mondragon University. He is also a social movement organiser and activist focused on global debt, ecology, and mutual aid, and a senior yoga instructor based in London.
