Dipping in the Money Pool

Across a picnic table loaded with foil vats of marinated beef, money is changing hands. Vietnamese immigrant Da Bui, seated in a metal chair in the corner of a north Houston warehouse, is genially collecting checks and dollar bills in the sum of $210 each from 30 of his closest friends. He doesn't keep a list in front of him, or write down names. Instead, he eats his spicy beef with gusto, attentively examines a photograph of someone's grandchild and claps appreciatively when a teenager rises from folding chairs to sing a pop song for the crowd.

Later, Bui will hand two guests checks for slightly less than $3,000 apiece. And before the night is done, the group will choose two more members, destined to serve dinner -- and collect big checks -- when the party takes place at another location next month.

Such sociable gatherings of similar "savings clubs" take place all over Houston, and have been almost as long as Vietnamese, Koreans, Chinese, Cambodians, Africans and South Americans have made their way to the city. These informal, protective and benevolent societies provide immigrants in need -- and many who aren't -- with a system of tax-free, interest-free loans. The purpose is to save money, not to make it. Though each group has a different name for it -- in Vietnamese it's a hui, in Cambodian it's a tong-tine and to Ethiopians it's ekub -- the core idea of combining financial, moral and social support into one recurring ritual is the same.

This is how it works: typically, anywhere from six to 30 friends will contribute a pre-determined sum at weekly or monthly meetings. Then, through lotteries or a group decision, each member gets a chance to collect the whole pot. After drawing the money, he or she keeps paying the installments until each group member has had an opportunity to take home the accumulated money. Only when a cycle finishes may a new member sign on or participants drop out. More often, though, the same participants begin again. In some groups, they take their place in line by lottery; in others, they may compete with secret bids of ten or 15 dollars that go back to the pot. In the Vietnamese group that Da Bui founded, members make the case for urgent needs -- a funeral, a wedding or a new baby -- and the group decides who the next recipients should be.

Such arrangements are so effective at making cash quickly available to those who couldn't otherwise get credit that social scientists have experimented with starting savings clubs among native-born Americans. But there's a catch: what's needed to make the clubs work, aside from a member's willingness to contribute a modest sum of money at regular intervals, is a discipline that in the past couple of decades seems to be disappearing from U.S. culture. That includes the ability to save, to make cash payments and feel a nauseous shame at the prospect of defaulting on a debt.

Not that saving's easy for many of the immigrants. Da Bui's group, for example, began 13 years after its first participants arrived in the United States. That's because most Vietnamese in Houston simply had no cash at all when they arrived here in the chaotic wake of Saigon's fall. "We had to deal with survival. We had no money, and no position to organize things," explains Martin Ha, director of a nonprofit refugee assistance group in Houston and a founding member of Da Bui's club.

Now, while about half the group's members are settled enough to enjoy the club as much for the camaraderie as for the yearly infusions of cash, the other half includes newly arrived immigrants who make just enough to add to the kitty but still desperately need the lump-sum loans for necessities like cars, house payments or furniture. To speed the distribution cycle, Bui's group divides each month's pool between two different members. Ten dollars from each contribution always goes to the celebration dinners that each month's winners must serve. Unless a winner chooses to give his place to someone else -- and that happens fairly often -- each person gets a shot at the money every 15 months.

One of the club's two recipients in March, Thua Ngo, presides over a modest empire consisting of an auto body shop, a carpet store and a half-built warehouse on a nearby lot. Ngo will use the funds to keep construction going on the warehouse. "It's not enough to get the warehouse done," he shrugs. "But it's useful."

By contrast, the wad of dollars that 64-year-old Thom Long took home last year literally launched his new life here. Like almost all the members of the club, Long is a former officer in the Vietnamese navy; most members are friends from decades back and attended military school together before the war. And like many of them, Long spent more than a decade in a Vietnamese re-education camp after the war ended. Four years after his 1988 release, the U.S. Catholic Conference loaned Long and his family money for plane tickets to the United States. Now he has a part-time, minimum-wage job at the refugee center directed by Martin Ha.

"The group helped me to buy a car to go to work," Long says through a translator. With his fragile grasp of English and his $300 monthly salary, Long would have been a long shot to obtain a loan for the auto. But because his five adult children also earn minimum wage in a costume jewelry plant, Long is confident that he can make good the monthly $210 debt among his friends. They are confident as well.

"In seven years, no one has defaulted," says Ha. "We have to save money to pay each other back. We have to trust one another. Two hundred dollars is an obligation. To save money, you eat less, you have to be very careful spending your money. It's a priority."

Although the occasional all-out bounder does find his way into a group -- most Cambodians and Vietnamese in savings clubs have heard about someone who's fled to California with a month's worth of his former friends' dollars -- defaulting on one month's payment leads to nothing short of social ostracism. "A cheater would be completely disrespected by the community," explains Kassahun Bisrat, an Ethiopian who is executive director of the nonprofit Refugee Services Alliance.

Most of Houston's estimated 3,000 Ethiopians and Eritreans are political refugees who fled the military dictatorship of Mengistu Haile Mariam in the 1980s. The exiles are a close-knit community, who brought with them the Ethiopian mutual self-help tradition called ekub. In Ethiopia, ekub funds smooth life passages such as weddings and funerals; in Houston the project to be paid for tends to be a car or seed money for a business.

In both countries, the community's sheer closeness is what keeps people from reneging on their payments. "There is no cash in countries like Ethiopia, and you don't expect someone to have several hundred dollars on hand for a funeral. So people help each other," Bisrat says. "And usually, the villages are not that large. Everybody knows everybody else."

It's that deep trust born of shared traditions and geography, with its nuanced ethnic and cultural reinforcement, that's made the self-help system so effective among Houston's immigrants. And it's why mutual assistance groups are so hard to set up among Americans and even assimilated immigrants with their diverse values, says University of Texas sociologist John Sibley Butler.

"It's all based on trust and saving face," Butler says. "You just don't default. In the United States, it used to be to file bankruptcy you'd be shamed. But our whole banking system is based on the idea that you can bail out of loans and default."

For 65-year-old refugee center director Martin Ha, the savings club organized by Da Bui seven years ago is helpful in events like his son's recent wedding but isn't crucial to his financial well-being. Instead, Ha enjoys the continuity of monthly parties with his old military friends and the knowledge that on a birthday, wedding, pay raise or funeral -- the four traditional big occasions of Vietnamese social life -- the 31 savings club members and their families will help his family celebrate or mourn.

"In Vietnam, although such groups are very, very common, I didn't join one," Ha says. "I didn't realize the value of this tradition, of getting together and helping each other. And maybe I didn't need it as much, emotionally or financially."

But maybe inevitably, even the most traditional savings clubs have been infected with a certain American expansiveness. After two decades of life in the United States, Martin Ha can't help but dream of an American-style corporatization of even this most delicate of group relationships. Clasping the upper arm of his old friend Thom Long, Ha outlines the big plans he has for the club.

"I'm thinking of the legal aspects," he explains eagerly. "We want to incorporate. If we do that, we could apply for a federal grant to employ two senior citizens from the Chinese Community Center to administrate us. Then we could provide refugee services to others. I think we could provide better services than many bureaucratic offices could, if we got grants. And we could extend our assistance work far beyond the group we already have.


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