Alternative financial vehicles: rotating savings and credit associations (ROSCAs)

Abstract

This paper describes how ROSCAs work and discusses the benefits that accrue to ROSCA participants and some of the costs they incur. Of particular interest is the introduction of a partial data set collected from a local ROSCA, which offers a glimpse of the capital costs ROSCA participants face and which could ultimately be contrasted with the capital costs faced by borrowers at mainstream financial institutions.