Tuesday, August 31, 2010


this was on page 8 of the straits times, 28 june 1985

i remember my mother subscribing to a tontine initiated by a distant relative who lived in the same kampong. the tontine head was referred to as the 'huay tow'. from what i have learnt, most of the tontine heads in my kampong were women. they would gather a few friends, relatives and neighbours to join the scheme. the number subscribing to a tontine was not fixed; it could range from fewer than 10 to more than 30. it was not impossible for some tontines to have more than a hundred members, considering that quite a number of the tontine heads absconded with a few hundred thousand dollars.

tontine was basically intended as a mutual aid programme. it was a way of securing a substantial sum of money at short notice to meet a contingency or to settle a debt. not all who joined a tontine, however, were desperate for money. some might have more than one share in the same tontine.

the contribution varied from one tontine to another. in the early years, monthly subscription could be as little as $10. that particular tontine my mother joined was $50 per share. bidding was held on a fixed day, usually, once a month. it was not compulsory to turn up for the bidding. the pool of money went to the highest bidder. sometimes when there was no bidder at all, the 'huay tow' would call on qualifying members to ask if he or she would like to put in the minimum bid.

if you had bidden and collected from the pool, then your share would be considered 'sie huay' (dead tontine). subsequently, you would have to pay the full amount of $50 each month until every member had received her share from the pool. in some cases, the 'huay tow' got a cut, like a service charge, from the pool money. if you had not collected from the pool, then your share was considered alive ('wuat huay').

my wife explained to me how it worked. let us say the monthly contribution was $50 and there were 10 members, including the 'huay tow' in the group. for example, member 'ah soh' highest bid was $5. she would get a total of $405. since her bid was $5, the other 9 members needed to pay her only $45 ($50 - $5) each. this gave a total of $405. where a service charge was due to the tontine head, 'ah soh' would end up getting only $380.

usually, the member who took the last pool profited the most. so, those who were not in urgent need for money would not bid high at all. they would just put in a nominal bid each month or not placed any bid at all.

as tontine was quite loosely organised, there could be variation as to how the pool of money was distributed. in some cases, the 'huay tow' was entitled to the first loan. the head could dispense with the service charge, especially if all the members were close friends or relatives.

we often read about the disappearance of tontine heads in the daily newspapers. there was one case where the organiser of a tontine absconded with more than a million dollars. in fact, after organising a few tontines, the 'huay tow' of my mother's tontine group went into hiding in muar, johor, for a few years.
tontine was illegal and it still is.


Dogcom said...

Ah yes Tontine, I remember my father participated in these schemes. You usually try to exercise due intelligence by joining one that is headed by a familiar figure or through introduction by a friend or a relative but every once in awhile news of tontine head absconding will make it's round in the neighborhood.

My father were on these scheme most of time during my childhood days. He was always in need of money cos we were a family of ten kids. So this scheme were a great help for the poor if operated by an honest guy.

yg said...

hi dogcom, those who were better off in the community like the land lords and shop-keepers would assume the role of a tontine head and the poor ordinary folks like our parents became participants in the scheme.
sometimes, the tontine head had to go into hiding through no fault of hers. if some members, after collecting money from the pool, failed to follow-up with their contributions, then the tontine head would be in trouble.

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