In most parts of the world especially in Africa, a group of persons especially civil servants or traders often come together for the purpose of saving money as a group. However, an innovative way to do same online has just been made available by Yahoo, through the just-launched Tanda social savings app.
Yahoo Finance today launched a new app called Tanda which allows small groups of either five or nine persons to save money together for short-term goals. The yahoo tanda app uses the concept of a “money pool” – that is, everyone participating in one Tanda’s collaborative savings circles will pay a fixed amount to the group’s savings every month. And every month, one member gets to take home the full savings.
This should not be confused for a gambling app. That is, users are not contributing in the hopes of “winning” all the money. Instead, everyone in the savings circle gets a chance to take home the full contributions at some point.
The tanda social savings app is based on the age-old “rotating savings and credit associations” (ROSCA) pattern which makes people save through the use of collective pressure. While you could just set aside a fixed amount of money on your own periodically to save, this app makes saving a more collaborative and socially fun experience.
The other difference between saving in Tanda and saving on your own is how the app handles payouts. The first two people to receive their money pay a fee, but the last payout position receives a 2 percent cash bonus. This reward users who are willing to wait to receive their turn at the pot, though some will want higher positions in order to get the large payout sooner.
A higher position is obviously more desirable if you have a more urgent need of the funds. Of course, you still have to pay into the yahoo Tanda app to take money out. But, with some planning, it could be used as an alternative to making larger purchases.
As a user participates in Tanda by making contributions, they get “Tanda score” which steadily increases. The higher the scores, the more access a user gains to higher value savings circles and earlier payout positions. These savings circles can reach up to as much as $2,000. Where someone drops out at some point, Tanda will step in to cover their positions.
Tanda social savings app is also in a partnership with Dwolla to vet users before they can begin saving. Before being able to use this app, users will be required to submit a valid ID and have a U.S. bank account. For Yahoo, the idea of the App is to help individuals achieve their financial goals without accumulating more debt.
The company hopes this will allow Tanda to attract larger audiences, that are already drawn to social apps in the finance space, like Venmo. In addition, this younger generation is facing various financial struggles, such as higher costs of living, difficulties in finding work, and serious struggle to save on their own.
The Head of Media Businesses and Products, Khalaf Simon, in explaining the idea behind the tanda social savings app stated that a report indicated that over 46 percent of people could not pony up at least $400 which could be used in an emergency. Hence, they came up with a unique method of saving more while still retaining the draconian method of community-saving.
The Yahoo Tanda App is available today in both English and Spanish on Android and is expected to arrive on iOS in a few days time.