Yes. Essentially, you're lending money without interest.
This article has been labeled "coming soon" for over a year now. Today, I'm finally going to stop procrastinating and write it.
Okay, time for a story. I never really thought much of equbs before. I just saw them as another way of saving money. This changed when my sister joined an Equb (at her school, I was very surprised). Each member contributed 100 ETB per week to the Equb, totaling 10 members. So, every week, one person received 1,000 ETB. That's essentially how Equbs work.
At first glance, this may seem like an innocent form of collaboration, but it's not.
People often join Equbs because they have something in mind they want to buy. This was true for my sister as well. I don't remember exactly what she wanted to buy, but I think she needed around 500 ETB for it.
With this context we can move on to the first bad thing about Equbs.
Inflation
Equbs randomly select one person who hasn't already received a payout in a given cycle on every payout date. This is essentially how they operate, though this rule can be changed based on who needs the money at a particular time.
The Equb my sister was in operated on the random selection method. Each week, one person out of the 10 would be selected to receive a payout. After receiving the payout, the person's name would be removed from the drawing pool until the next cycle. My sister got her payout in the 6th week.
As planned, my sister went to the shop to buy the thing she wanted. She thought she only needed 500 ETB because that was the price when she last checked. However, due to inflation, the price had risen to 700 ETB.
Now, let's think this through. With her 1,000 ETB payout from the Equb, she would only have 300 ETB left after buying the item for 700 ETB. If she had received the payout in the first week, she would have paid 500 ETB and still had another 500 ETB left. This is a particularly annoying situation.
Another annoyance was that she received her payout in the 6th week. Since they were contributing 100 ETB per week, she had already saved the money she needed for the purchase by the 5th week, but she had to wait until the 6th week. In this scenario, she would have been better off putting her money under her bed and saving it that way.
This makes Equbs very unfair. A person who receives the funds in the first couple of cycles will get more value than someone who receives the funds later on. One solution could be not storing the funds in ETB. Perhaps the group would be better off storing the funds in BTC or USDT.
No Interest
Equbs are peculiar financial systems in that the financial outcome for each member depends on which cycle they receive their funds. The person who receives the funds first is effectively borrowing money without paying any interest; they just have to pay back some of the principal on each cycle. The person who receives the funds last is effectively just lending money without receiving any interest. Combined with inflation, this leaves them in a worse situation than when they started.
With all this being said, I can effectively say that Equbs are just a less evolved version of banks. Like an Equb, a bank collects money from its members and lends it out to those in need. The borrowers pay back the bank with interest, and the bank can then distribute some of this profit to the people who are storing their money with the bank.
And that's why Equbs are actually bad. Perhaps someone should create a variation of the Equb idea where the funds are stored in BTC, and where people who haven't contributed at least 50% of the payout pay interest, because they are effectively borrowing money.