Rotating Savings and Credit Association

Encouraging Banking in Unbanked Communities with ROSCA

We encourage our croscalients to discontinue business consulting within twelve months and to enter with their former peers into their own Rotating Savings and Credit Association (ROSCA) to obtain lump sums of money. In this program, participants continue to work with each other to grow their businesses, but without the guidance of a business consultant or any loan financing. The money is governed and managed by the group of cohorts themselves using their own savings – not outside resources – as capital.

For example, each member of the ROSCA contributes $50 to the group’s pot at regularly scheduled meetings. The members then take turns getting the pot, with one member getting the entire pot at each meeting. The member selected to receive the entire pot hosts the meeting at their own house and plans the discussion topic. If the member is having problems with an advertisement related issue, they might host the meeting discussing successful advertisements within their area. Even after each member gets their turn at the “pot,” they will continue to make the agreed-upon, $50 weekly pay-in until each person has rotated through and received their turn at the pot. If the ROSCA has worked well, the members will usually choose to repeat the cycle.

The importance of the ROSCA program is that it allows the successful cohorts to continue to build on their success that was previously developed. This program allows them to continue to participate in a weekly discussion groups about how to grow their business and their network. This is also a formal group that the business consultant will write out formal legal contracts for each member to sign. Our aim is that as the group of peers become more successful, their contributions increase and they might aim to help their community with their own contributions.

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