Savings and loan clubs: Risky ventures or good business practice? A study of the importance of rotating savings and credit associations for poor women1

Abstract

This article is based on research into rotating savings and credit associations (ROSCAs) which was conducted for the HSRC Cooperative Programme on Marriage and Family Life, in Grahamstown (Rhini) and Zwelitsha, near King William's Town, Eastern Cape, in 1993. One hundred women and men who were members of different ROSCAs were interviewed. These associations had from six to 22 members each. Unstructured interviews with members were the main method of research but meetings and events, organised by members of Roscas in these areas, were also attended The interviews were conducted by the author and three research assistants, two of whom were first‐language Xhosa speakers. Use was also made of an aide‐memoire based on Ardener (1964). Pseudonyms have been used throughout the article to protect the anonymity of informants. The research found that among poor women, both wage earners and self‐employed, membership of a Rosca was a support mechanism in their search for income‐earning activities, and a means of maximising their resources. In addition, membership of such schemes provided a supportive environment in which women could enjoy socialising at the weekly meetings, and also make important contacts which assisted them in their business and childcare activities.