327:
money distribution among members, a drawing of slots is done and agreed upon before the start of periodic fund accumulation. A member can swap his slot with another through mutual agreement depending on the intended purpose. Such slot switching is allowed before the fund accumulation or periodic money withdrawal. A member who availed more than one slot may have the reserved right to choose the other slot pay date. Nevertheless, to avoid confusion, the organizer should be informed of the changes before the payment process. Each member contributes the same amount at each meeting, and one member takes the whole sum once. As a result, each member can access a larger sum of money during the life of the ROSCA and use it for whatever purpose she or he wishes. This method of saving is a popular alternative to the risks of saving at home, where family and relatives may demand access to savings.
490:
that "It represents a contract. Members of the association — the parties to the contract — agree to pool certain resources that are then given, in whole or in part, to each in turn. Resources in the pool can be labor, goods or money." Related to that point, Bouman also explained that "The ROSCA has several functions: insurance, socializing , and economic. The former has been the basis of the ROSCA. Since the sixties, increased commercialization and monetization have put the emphasis on the economic function." Bouman also explained that because (1) breach of contract is an inherent risk of ROSCAs and (2) in many countries' legal systems, recourse to law courts for remedy is not available for ROSCA contract breaches, ROSCAs have been criticized and discouraged in some times and places.
413:, an American NGO, has spread standardized ASCAs to reach 2 million people in Africa. These standardized ASCAs are called village savings and loan associations (VSLAs), and they usually comprise 10 to 20 participants who conduct saving and loan activities for a fixed period, usually 12 months. Unlike informal ASCAs, these use a triple-locked box to secure the funds, have standardized election procedures and maintain a careful separation of various duties, such as record-keeping, money-counting, meeting facilitation etc. Interest rates on loans typically vary from 5–10% a month, while cycle-end pay-outs in most groups is 30–60% of invested capital.
437:
eMoneyPool, created by two brothers living in
Phoenix, Arizona; Monk, founded by ex-Google and ex-Intel employees in Silicon Valley; Puddle, a Google-venture backed startup, Moneyfellows UK & African based online mobile and web platform digitizing the ROSCA model; ROSCA Finance, a patent pending startup creating a global, autonomous money sharing platform founded by former Santander bankers; Esusu, founded by ex-Goldman Sachs, PwC and LinkedIn employees in New York and Partnerhand, a patent pending UK based organisation facilitating online 'Pardner's' between verified individuals, founded in 2010.
390:), and a genuine commitment to participate. In Brazilian consorcios, groups of strangers are assembled into a ROSCA unit by an agent or intermediary, whose role in facilitating the group formation and on-going administration is remunerated. As at 2015, over five million active ROSCA users were reported in Brazil. As the consorcio runs its term, many of the same features of social capital and compliance manifest, as members of the group develop personal contact and trust.
402:(ASCAs). Documented extensively in South Asia by Rutherford, ASCAs are also time-limited, informal microfinance groups. Unlike ROSCAs however, they appoint one of their members to manage an internal fund. Records are kept and surplus lent out. After a pre-agreed period (often 6–12 months) all the loans are called back and the fund, plus accumulated profit, is distributed to the members.
436:
Carlos Veléz-Ibáñez, an anthropology professor at
Arizona State University, stated that "technology has added a new twist to the savings pools, with 'electronic cundinas' being organized on Web sites that can bring together people from across the United States". A few of the existing products include
489:
of them was by
Shirley Ardener in 1964. In 1983, F. J. A. Bouman described ROSCAs as "the poor man's bank, where money is not idle for long but changes hands rapidly, satisfying both consumption and production needs." In a 1995 article on the origins and development of the concept, Bouman explained
416:
As of the end of June 2012 development agencies (including CARE, Oxfam, CRS and PLAN) were carrying out projects reaching 1.8 million members in 23 countries, mostly in Africa. The
Savings Group Information Exchange, a project of the Bill and Melinda Gates Foundation, provides researchers with an
326:
Meetings can be regular or tied to seasonal cash flow cycles in rural communities. These usually coincide with the crop harvest for farmers and pay dates for the employed members where people have sure funds on hand. A slot is equivalent to one periodic money withdrawal. To determine the order of
440:
StepLadder, founded in 2016 by finance professionals with distinguished academic work on
Consorcios in Brazil is joining the UK market for ROSCA-based collaborative finance by serving prospective first-time UK home buyers. In October 2017 Finlok platform launched a digital ROSCA product in India
330:
Every member sees every transaction during the meetings. Since no money has to be retained inside the group, no records must be kept. However, some maintain a crude list of slots. These characteristics make the system a model of transparency and simplicity well adapted to communities with
408:
practitioners have been intrigued for years by the potential benefits of attempting to link ROSCAs and ASCAs to formal financial systems. But such linkages tend to defeat the voluntary purpose of these groups and distort member incentives towards securing access to external funds.
382:
in
Eastern Java. He described them as "an 'intermediate' institution growing up within peasant social structure, to harmonize agrarian economic patterns with commercial ones, to act as a bridge between peasant and trader attitudes toward money and its uses."
338:
The system further reduces the risk to members because it is time limited—typically lasting no more than six months. Each member receives at least once the amount collected. This reduces the size of the loss should someone take funds early and not pay back.
982:
van den Brink, Rogier and Jean-Paul Chavas, "The
Microeconomics of an Indigenous African Institution: The Rotating Savings and Credit Association." Economic Development and Cultural Change, Volume 45, No. 4, July
342:
In addition to their simplicity of structure, ROSCAs compensate when two key conditions exist, which make them competitive alternative financial products, even in relatively sophisticated economies:
53:
Economist F. J. A. Bouman described ROSCAs as "the poor man's bank, where money is not idle for long but changes hands rapidly, satisfying both consumption and production needs."
969:
960:
Remilien, E., Vivar, R.., Servín, R., Valtierra, E., & Pérez , L. M. (2024). Topic modeling analysis of
Community Savings Groups: evidence from the combined literature.
749:"System, Method and computer program for operating web-based collective e-money lending/borrowing circles between members and non-members of social networking websites"
1006:
993:
De Swaan, Abram and Van der Linden, Marcel. (eds.) "Mutualistic
Microfinance, Informal Savings Funds from the Global Periphery to the Core?". Aksant, 2005.
943:
Besley, Timothy, Stephen Coate, and Glenn Loury. "The economics of rotating savings and credit associations." The
American Economic Review (1993): 792–810.
20:
349:
Failure of the normal financing market to provide credit to credit worthy borrowers, often due to opportunity cost, regulation, or operational expense
19:"ROSCA" redirects here. For the U.S. law that limits companies' ability to force consumers to receive recurring charges without their permission, see
641:
477:
enables users to join clubs administrated by the company and leverages on credit card payments and rates much lower than traditional auto loans.
417:
on-line database where indicators like savings and loans per member, country, return on assets and percentage of female members can be compared.
933:
Ardener, Shirley and Sandra Burman. "Money-Go-Rounds: The Importance of Rotating Savings and Credit Associations for Women". Oxford: Berg, 1995.
970:
https://www.researchgate.net/publication/378337711_Topic_modeling_analysis_of_Community_Savings_Groups_evidence_from_the_combined_literature
399:
291:
587:
1016:
813:
428:
in the last half of the nineteenth century. These provided many workers with the funds required to finance their own homes.
936:
Arnaldo, Mauri, "Economia sommersa, finanza informale e microcredito nei paesi emergenti", A: Mauri & C. Conti (eds.),
762:
571:
950:. Cambridge, Massachusetts, United States: Massachusetts Institute of Technology, Center for International Studies, 1956.
459:
financial services with the goal of offering these services to millions of people in Africa and around the world. The
386:
The individuals in the ROSCA select each other, which ensures that participation is based on trust and social forces (
662:. Cambridge, Massachusetts, United States: Massachusetts Institute of Technology, Center for International Studies.
446:
76:
71:
405:
132:
514:
144:
690:
Grant, William J.; Allen, Hugh (Fall 2002). "CARE's Mata Matsu Dubara (Women on the Move) Program in Niger".
1021:
1011:
720:
509:
486:
473:
A more complete version of a savings club for buying vehicles launched in the United States on 2022.
460:
370:
groups that have been documented around the developing world. A famous early study by anthropologist
47:
43:
346:
Erosion of buying power of accumulated savings over long savings horizons in inflationary conditions
499:
421:
912:
529:
456:
81:
877:
831:
904:
519:
425:
359:
843:
463:
371:
102:
485:
Informal agreements of this type have arisen all over the world for centuries. The first
938:
Finanza informale, finanza etica e finanza internazionale nelle piccole e medie imprese
387:
780:
707:
Village Savings and Loan Associations (VSLAs) Programme Guide, Field Operations Manual
1000:
957:. Journal of Microfinance, Brigham Young School of Business, Provo, Utah, Fall, 2002.
748:
410:
613:
Examining the Access to Credit of Zomi Women through the Lens of the Lawm Sum System
673:
367:
363:
61:
ROSCAs are known by various names around the world, and some of those names become
895:
Ardener, Shirley (1964). "The Comparative Study of Rotating Credit Associations".
524:
190:
897:
The Journal of the Royal Anthropological Institute of Great Britain and Ireland
66:
34:) is a group of individuals who agree to meet for a defined period in order to
299:
174:
881:
50:. Members all chip in regularly and take turns withdrawing accumulated sums.
504:
379:
286:
281:
218:
569:
Fleary, Sinai (June 2024). "Pardna: Keeping Black Money Traditions Alive".
866:"Rosca: On the Origin of the Species / Rosca: Sur L'origine Du Phenomène"
62:
865:
916:
332:
311:
126:
69:, especially in regional usage. For example, ROSCAs are also known as
248:
35:
908:
990:. EDI Series in Economic Development, World Bank, Washington, 1983.
794:
467:
315:
209:
138:
553:
Indigenous savings & credit societies in the developing world
442:
107:
39:
955:
CARE's Mata Matsu Dubara (Women on the Move) Program in Niger
948:
The Rotating Credit Association: a middle rung in development
734:
660:
The Rotating Credit Association: a middle rung in development
452:
335:
and weak systems for protecting collective property rights.
859:
857:
855:
853:
763:"'Pardner' in financial progress | The Voice Online"
986:
Von Pischke, J. D., Dale W. Adams & Gordon Donald.
721:"Traditional Mexican Savings System's Popularity Grows"
474:
795:"Need help saving for a house? Join a Savings Circle"
154:) in Chinese communities in East and Southeast Asia,
642:"Consorcios and Brazils Consumer Credit Innovation"
814:"New company in Texas offering loans for 80% less"
420:Another interesting variant on this theme are the
67:various ones that have made their way into English
694:. Provo, Utah: Brigham Young School of Business.
988:Rural Financial Markets in Developing Countries
557:Rural Financial Markets in the Developing World
812:News, E. I. N.; Team, Marketing (2022-12-02).
195:
674:"Relatorio de Inclusao Financiera No.3, 2015"
547:
545:
466:was founded by an ex-Safaricom employee from
163:
149:
8:
400:accumulating savings and credit associations
183:
398:ROSCAs can be compared and contrasted with
555:in Von Pischke, Adams & Donald (eds.)
90:
588:"Scots Word of the Week: Menage, menodge"
1007:Rotating savings and credit association
541:
28:rotating savings and credit association
21:Restore Online Shoppers' Confidence Act
839:
829:
636:
634:
310:in Zomi regions in both Chin State in
7:
953:Grant, William J. & Hugh Allen.
628:Oxford University Press, Delhi, 2000
424:that formed part of product line of
306:in Cameroon and صندوق in Sudan, and
705:Allen, Hugh; Staehle, Mark (2007).
142:in West Africa and the Caribbean,
14:
85:in Swahili-speaking East Africa,
615:, The Institute, Australia, 2024
292:Democratic Republic of the Congo
114:partnerhands, pardna or pardner
979:Oxford University Press, 2000.
559:, World Bank, Washington, 1983
470:and it launched in late 2020.
164:
150:
1:
65:between languages, including
42:together, a form of combined
455:has automated and digitized
16:Form of peer-to-peer banking
709:. Solingen: VSL Associates.
1038:
767:archive.voice-online.co.uk
679:. Banco Central do Brasil.
626:The Poor & Their Money
354:Diversity and distribution
264:(धुकुटी/ढिकुटी) in Nepal,
18:
658:Geertz, Clifford (1956).
586:Speitel, Pauline Cairns.
447:Unified Payment Interface
406:International development
196:
184:
91:
977:The Poor and Their Money
515:Community banking models
256:(เล่นแชร์) in Thailand,
870:Savings and Development
864:Bouman, F.J.A. (1995).
692:Journal of Microfinance
1017:Collaborative finance
510:Collaborative finance
244:C.A.R. Țigănesc/Roata
975:Rutherford, Stuart,
487:academic description
422:terminating deposits
188:/契) in South Korea,
172:in the Philippines,
116:in the West Indies,
79:) in Latin America,
48:peer-to-peer lending
44:peer-to-peer banking
962:Agro Productividad
624:Stuart Rutherford.
500:Bond of association
333:low literacy levels
204:in pre-1945 eras),
112:(እቁብ) in Ethiopia,
946:Geertz, Clifford.
842:has generic name (
530:Solidarity lending
426:building societies
178:(جمعية) in Egypt,
781:"Companies House"
735:"partnerhand.com"
551:F. J. A. Bouman,
130:in South Africa,
1029:
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583:
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520:Friendly society
199:
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153:
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96:
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496:
483:
434:
396:
374:documented the
372:Clifford Geertz
356:
324:
200:) in Japan (or
97:) in Pakistan,
92:
59:
24:
17:
12:
11:
5:
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903:(2): 201–229.
887:
876:(2): 117–148.
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388:social capital
355:
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350:
347:
323:
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252:in Indonesia,
230:in Guatemala,
168:) in Vietnam,
58:
55:
15:
13:
10:
9:
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4:
3:
2:
1034:
1023:
1022:Credit unions
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611:Go Suan Pau.
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575:. p. 22.
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432:Online ROSCAs
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319:
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314:and Lamka in
313:
309:
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297:
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288:
283:
279:
276:in Scotland,
275:
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101:(વિસિ) among
100:
88:
84:
83:
78:
74:
73:
68:
64:
56:
54:
51:
49:
45:
41:
37:
33:
29:
22:
1012:Microfinance
987:
976:
963:
961:
954:
947:
937:
928:Bibliography
900:
896:
890:
873:
869:
821:. Retrieved
817:
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798:
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743:
729:
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668:
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625:
620:
612:
607:
595:. Retrieved
591:
581:
570:
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556:
552:
484:
475:savings.club
472:
453:Aturi Africa
451:
439:
435:
419:
415:
404:
397:
385:
375:
368:microfinance
364:co-operative
357:
341:
337:
329:
325:
307:
303:
295:
285:
277:
273:
269:
265:
261:
257:
253:
247:
246:in Romania,
243:
239:
235:
231:
227:
223:
217:
213:
205:
201:
189:
179:
173:
169:
159:
155:
143:
137:
131:
125:
124:in Somalia,
121:
117:
113:
106:
98:
86:
80:
70:
60:
52:
31:
27:
25:
840:|last=
525:Microcredit
441:leveraging
358:ROSCAs are
268:in Turkey,
226:in Brazil,
191:tanomoshiko
120:in Mexico,
77:other names
57:Terminology
1001:Categories
823:2022-12-05
799:StepLadder
592:The Herald
536:References
300:Mozambique
287:likelembas
222:in India,
219:chit funds
214:committees
206:wichin gye
105:in India,
882:0393-4551
572:The Voice
505:Chit fund
380:Modjokuto
322:Structure
282:Sri Lanka
242:in Peru,
224:pandeiros
170:paluwagan
103:Gujaratis
63:loanwords
832:cite web
818:EIN News
494:See also
362:or 'pre-
360:informal
308:Lawm Sum
304:djanggis
278:seettuva
254:lenshare
240:panderos
236:quiniela
228:cuchubál
127:stokvels
118:cundinas
968:35-41.
917:2844382
481:History
464:StartUp
461:FinTech
376:arisans
312:Myanmar
296:xitique
290:in the
274:menodge
262:dhikuti
258:dhukuti
175:gam'eya
75:(or by
915:
880:
597:8 June
270:ménage
249:arisan
232:juntas
139:osusus
122:hagbad
110:(ekub)
87:kameti
82:chamas
72:tandas
40:borrow
983:1997.
913:JSTOR
677:(PDF)
645:(PDF)
468:Kenya
457:Chama
394:Types
316:India
210:Korea
202:mujin
133:susus
93:کمیٹی
32:ROSCA
966:(1),
878:ISSN
844:help
599:2021
443:NPCI
411:CARE
197:頼母子講
108:equb
99:visi
46:and
38:and
36:save
905:doi
445:'s
378:of
298:in
280:in
272:or
266:gün
260:or
238:or
216:or
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180:gye
160:hụi
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