Informal Finance: The Rotating Saving and Credit Association — An Interpretation

Can an Islamic Model of Housing Finance Cooperative Elevate the Economic Status of the Underprivileged?

“…This result is consistent with Emmons and Mueller (1997), Buijs (1998), Hart and Moore (1998) and Smets (2000). It also supports the following assertion of Callier (1990):…”

ROSCAs in Urban Ethiopia: Are the Characteristics of the Institutions More Important than those of Members?

“…However, subsidised government interventions often failed, mainly due to implementation inefficiency and informational uncertainty, leading to a re-evaluation of the role of informal finance (Callier, 1990;UNCTAD, 2007). Addressing problems associated with informational asymmetries, moral hazard and adverse selection for the design of specific policies and institutions motivated research on informal financial markets (Diagne and Zeller, 2001;van den Brink and Chavas, 1997;World Bank, 2008).…”

Promises kept: enforcement and the role of rotating savings and credit associations in an economy

“…As noted earlier, in order to guarantee financing to all members, a rosca must ensure that its members continue to make their promised contributions-even after they have 9 The intuition for equal payments, discussed above, should now be apparent: As established by Callier (1991), a random allocation mechanism treats all members equally ex ante. This implies that each member i has the same expected receipt date and the same ex ante expectation about the fraction of the investment period over which his project will be in operation, so there is no incentive for any one entrepreneur to offer to pay more than another.…”