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Periodical article | Leiden University catalogue | WorldCat |
Title: | Rotating Saving and Credit Associations in Rural East Africa |
Author: | Kimuyu, Peter Kiko |
Year: | 1999 |
Periodical: | World Development |
Volume: | 27 |
Issue: | 7 |
Period: | July |
Pages: | 1299-1308 |
Language: | English |
Geographic terms: | Kenya Tanzania |
Subjects: | self-help associations credit Economics and Trade Development and Technology |
External link: | https://doi.org/10.1016/S0305-750X(99)00049-2 |
Abstract: | Theoretical arguments suggest that rotating savings and credit associations (ROSCAs) improve welfare by reducing the utility cost of saving for a consumer durable. This article examines participation in ROSCAs by households in rural East Africa. Data collected in 1991-1992 in two communities in Kenya (Murang'a District in the Central Province) and Tanzania (the slopes of Mt. Kilimanjaro) reveal major differences in the incidence of ROSCA participation, arising from differences in the level of market penetration and perceptions about the efficacy of alternative strategies for compensating for failures in the local financial markets. Participation in ROSCAs in these communities is partly driven by the need to raise school fees, meet medical expenses and buy food. ROSCA funds are also used to start or promote small businesses and acquire assets, including livestock. Households owning smaller landholdings and those enjoying higher expenditures are more likely to participate in ROSCAs. The number of schemes in which a household participates is related to the main uses of ROSCA funds while contributions and value of receipts are determined by total expenditures and frequency of turns respectively. Bibliogr., notes, ref., sum. |