Rotating Credit Associations Research Articles

The village bank of a Lisu community: Indigenous belief, economic practices, and environmental conservation in Southwest China

Using the rotating credit association created by a Lisu village, called the “village bank,” this study explores the social forces that have shaped, limited, or activated the ethnic community’s local environmental agency in southwest China. We argue that while the inherited elements of the Lisu indigenous beliefs could help local communities meet the ecological needs of our time, offering different ethics and perspectives to challenge the pursuit of material abundance based on extractive economic modes, the Lisu’s social and economic behavior is not solely determined by their religious beliefs. In the post-Mao economic reform era, village banks have become a fresh way through which Lisu villages activated their environmental agency, trying to achieve a balance between environmental protection and poverty reduction. Lisu’s “ambivalent” stance on environmental protection reflects the interactions between state-orchestrated development, NGOs, and the tension between maintaining tradition and reducing poverty.

An analysis of the coping strategies of small-scale female entrepreneurs in Harare, Zimbabwe

ABSTRACT This article analyses the strategies Zimbabwean women use to help them manage their small-scale businesses in Harare. Based on three focus groups as well as semi-structured interviews with the same respondents (n = 21), we consider the advantages and disadvantages conferred on the women by their social capital. The women networked to create rotating credit associations (ROSCAs) to generate working capital. They devised several ingenious mechanisms to reduce the risks involved in contributing money to a common fund. They tried to overcome collective action problems by maximising both confidence and trust. Social capital facilitated their agency in a disempowering context while at the same time exposing them to the free riding behaviour of in-laws. Finally, the social networks of these women are not independent of the social networks of other, better-connected women with whom they are in competition, which points to a weakness of social capital and neo-institutionalist perspectives.

Measures adopted by indigent mothers in Kilifi County to tackle maternal health challenges during the COVID-19 pandemic: A qualitative study.

Many sub-Saharan African countries have experienced various challenges that threaten the quality of health services offered to the population. The COVID-19 pandemic disrupted access to healthcare services in many countries as they grappled with implementing measures to curb its spread. The consequences of COVID-19 have been catastrophic for maternal and newborn health. There is a dearth of information on expectant mothers' negotiation mechanisms to access maternal health services during COVID-19 in Kenya. This rapid qualitative study draws data from purposefully selected 15 mothers who were either pregnant or had newborn babies during the COVID-19 pandemic in Kilifi county in Kenya. Data were analyzed thematically and presented in a textual description. Women used the following alternatives to access maternal health: giving birth at the homes of traditional birth attendants (TBAs), substituting breastfeeding with locally available food supplements, relying on limited resources and neighbours for delivery and local savings and rotating credit associations. This study shows that urgent measures are needed to provide high quality maternal and child health services during and after the COVID-19 pandemic. These include but are not limited to developing special interventions for the pregnant women for any emergency and establishing trust between communities and individuals through the TBAs.

ROTATING SAVINGS AND CREDIT ASSOCIATION (ARISAN): IMPACT STUDY ON HOUSEHOLD-LEVEL ANALYSIS

Despite the fact that informal financial service is one of the most important alternative solutions for those in need yet do not have the capability to access the formal ones, its role is understudied. This study aims to analyze the impact of one of the informal financial services that have been developing within communities, rotating savings and credit association that is popular in term of arisan in Indonesia, on household economy measured by its spending on food and non-food. Using information from two latest data of Indonesian Family Life Survey processed with the difference in differences and matching methods, results show that household participation in the arisan is able to increase food and non-food expenditure after adjusted with inflation. Robustness checking through controlling several covariates shows consistent output sign and significances. It demonstrates that, statistically, arisan is able to improve its participant economic capabilities.

Startup Supporting for Handicapped Persons and the Rotating Credit Association

Startup Supporting for Handicapped Persons and the Rotating Credit Association

Does the Village Fund matter in Thailand? Evaluating the impact on incomes and spending

Launched in 2001, the Thailand Village and Urban Community Fund (VF) provided almost US$2billion – a million baht for each of Thailand's 78,000 villages and wards – to provide working capital for locally-run rotating credit associations. Using data from the Thailand Socioeconomic Surveys of 2002 and 2004, we find that VF borrowers were disproportionately poor and agricultural. A fixed effects model using a panel of rural households for these years finds that VF borrowing is associated with, on average, 3.5% more current spending, and 1.4% more income; very similar impacts are found using a propensity score matching model applied to nationwide data in 2004, which also found that VF loans are associated with the acquisition of more durable goods. By way of contrast, borrowing from the Bank for Agriculture and Agricultural Cooperatives appears to have a stronger effect on income than on expenditures. The evidence also shows that the effect on expenditure (or income) of VF borrowing is strongest at the lower quantiles, and flowed disproportionately to low-income households; in both of these senses it is “pro-poor”.

The Suppression Hypothesis Reconsidered: Competition Between Blacks and White Immigrants in the Retail Trade in Large Northern Cities, 1910-1930

Introduction The development of entrepreneurship in retail trade in large northern cities during early 20th century was viewed by many leaders as essential to economic progress of blacks as group. If retail entrepreneurs could monopolize local trade in communities that were created in these cities by first wave of Black Migration to North (circa 1915-1930), then, it was believed, number of benefits would follow: These entrepreneurs would expand their businesses, hire additional employees, and, over long run, sustain network of black-owned wholesaling and manufacturing enterprises that could provide foundation for economy, that is, a cooperative arrangement of industries and services within Negro group such that group tends to be closed economic circle largely independent of surrounding white world (Du Bois 1907: 179, quoted in Waldinger and Aldrich 1990: 59). The basis of this belief was doctrine of double-duty dollar, which was popularized by church and press in urban North in 1920s and 1930s. This doctrine, which was evidently based on concept of multiplier effect in economic theory (Pearce 1986: 288), argued that money spent in retail stores owned by blacks would circulate within community and, in so doing, generate greater employment and incomes for blacks, locally and nationally (Drake and Cayton 1962: 430-431; see also Light 1972: 119, citing Harris 1936; Myrdal 1944). Accordingly, in wake of Great Migration, support for entrepreneurship in retail trade was vigorously encouraged in northern cities by churches, newspapers, and voluntary organizations, such as lodges and fraternal orders. This support often took form of buy black campaigns. These campaigns originated in urban North (Frazier 1957: 166) and emphasized the duty of to trade with Negroes and promised to blacks ultimate 'racial' salvation through their loyal patronage of black-owned retail stores (Drake and Cayton 1962: 430; see also Ofari 1970: 52). Sometimes support for entrepreneurship took form of attempts to promote cooperative ventures among those entrepreneurs who sought to become retail merchants. These attempts were motivated by belief that in retail trade would be achieved through efficiencies gained by pooling of resources, coordination of business practices, such as advertising, and standardization of goods and equipment. The Colored Merchants Association, founded in New York City by Albon Holsey in 1929 under auspices of late Booker T. Washington's National Negro Business League, was an example of such collective venture (Light 1972: 125, citing Harris 1936). In spite of these efforts, though, entrepreneurs struggled to establish themselves in retail trade in urban North. They faced numerous obstacles, including racial bias in lending and in extension of credit, exclusion from main commercial districts, restricted access to business training, and denial of both property rights and police protection (Boyd 2001: 242, citing Bates 1973; Butler 1991; Harmon 1929; Harris 1936; Higgs 1977; Myrdal 1944). Furthermore, by some accounts, they were also hampered by limited opportunities to gain experience in buying and selling (Frazier 1949: 411), dearth of entrepreneurial success symbols (Foley 1966: 572), and absence of socio-cultural heritage that included rotating credit associations that could generate financial capital for business startups (Light 1972: 22). As consequence of these and other difficulties, blacks were greatly underrepresented in retail trade. For example, in 60 large northern cities in 1930, number of retail merchants was, on average, 81 percent less than what would be expected on basis of representation of blacks in these cities' workforces (Boyd 2003a: 451). …

The Tanda: A Practice at the Intersection of Mathematics, Culture, and Financial Goals

We present an analysis and discussion of the tanda, a multiperson pooled credit and savings scheme (a rotating credit association or RCA), as described by two informants from Mexican immigrant communities in California. In the tanda, participants contribute regularly to a common fund which is distributed to participants on a rotating basis. We analyze the tanda at multiple levels (as a mathematical, cultural, and distributed practice) and identify points of intersection and conflict. Contrary to many formal or school-based conceptions of mathematics, mathematical work in the context of the tanda is in service of, and intimately tied up with, cultural goals and values. Likewise, cultural means and mathematics are employed to personal ends. We argue that the tanda should be of enduring interest, particularly among educators interested in bringing more authentic, culturally-relevant mathematics into classroom settings, because it so clearly illustrates how mathematical and cultural processes can interact in the context of personal goals, and provides a potentially valuable template for engaging, consequential, and successful mathematics.

What goes around, comes around: rotating credit associations among Ethiopian women in Israel

This article looks at how working-class Ethiopian women, who have migrated to Israel, have sought empowerment and economic control through the establishment of rotating credit associations known as iqqub. In the changing world of Ethiopian Israeli women, iqqub associations and their specific cultural manifestations constitute a highly meaningful experience, whose building-blocks incorporate the financial, the social, the ritualistic, and the symbolic. It is a complex mechanism of tradition and renewal: its existence challenges paternalistic assumptions regarding the status of Ethiopian immigrants vis-à-vis the state and its institutions and the experience of Ethiopian Israeli women specifically. As we shall demonstrate, the iqqub serves as a generative focus for gender relations and the dramatic changes that have affected them. Ethnographic examination of the iqqub and its internal discourse expands our understanding of the dynamics of change among the group's cultural, gender, and power relations.

Economic Incentive, Embeddedness, and Social Support: A Study of Korean-Owned Nail Salon Workers' Rotating Credit Associations

Much of the past research on rotating credit associations (RCAs) in the U.S. Korean community has been conducted in the context of Korean entrepreneurs' success in small businesses. By contrast, little has been known about the significance of RCAs in the lives of Korean immigrant workers. Based on a sample of Korean female workers at Korean-owned nail salons in the New York–New Jersey area, the first aim of this study is to address whether Korean immigrant workers, like Korean immigrant merchants, take into account RCAs as a way to save money or raise capital. Second, this study also speculates about the importance of embeddedness (Granovetter) and social capital (Portes and Sensenbrenner) views for both economic behavior and a likelihood of malfeasance by RCA participants. Lastly, this study regards RCA membership as a mechanism of social support for its participating members. Overall, the analyses provide evidence that RCA membership at nail salons leads to both economic benefit and social support for some of its participants, and that embedded networks and an accompanying sense of trust have some connection to the suppression of its members' latent malfeasance.

Rotating Credit Associations of the Japanese in Argentina

Rotating Credit Associations of the Japanese in Argentina

Utilization of Social Networks for Immigrant Entrepreneurship: A Case Study of Korean Immigrants in the Atlanta Area

This study investigates what foundations of resource mobilization exist for immigrants to establish an entrepreneurial environment, in the case of Korean immigrants in Atlanta. Data was collected from face-to-face interviews conducted in 1994 with 159 Korean entrepreneurs who owned businesses in the Atlanta Metropolitan area. The study indicated that class resources based on educational background were decisive and indispensablein establishing social networks, which profoundly helped the immigrants in pursuit of entrepreneurship. Contrary to conventional perception that family networks provide resources for immigrant businesses, family-connected migrants in Atlanta did not show an advantage over non-family connected migrants in starting businesses more quickly. It is recommended that the concept of ethnic resources (unpaid family labor, frugal attitudes, hard work, rotating credit associations) be seen as separate from social networks and family networks because these resources operate differently. (CBS)

On the Development of Rotating Credit Associations in Japan

Previous articleNext article No AccessOn the Development of Rotating Credit Associations in Japan*Robert Dekle and Koichi HamadaRobert DekleUniversity of Southern California Search for more articles by this author and Koichi HamadaYale University Search for more articles by this author University of Southern CaliforniaYale UniversityPDFPDF PLUS Add to favoritesDownload CitationTrack CitationsPermissionsReprints Share onFacebookTwitterLinkedInRedditEmail SectionsMoreDetailsFiguresReferencesCited by Economic Development and Cultural Change Volume 49, Number 1October 2000 Article DOIhttps://doi.org/10.1086/452491 Views: 50Total views on this site Citations: 14Citations are reported from Crossref © 2000 by The University of Chicago. All rights reserved.PDF download Crossref reports the following articles citing this article:Morio Onda Rotating savings and credit associations as traditional mutual help networks in East Asia, International Journal of Asian Studies 18, no.22 (Mar 2021): 271–287.https://doi.org/10.1017/S1479591421000036Abdullah Talha GENÇ, Ali Can YENİCE, Zeyneb Hafsa ORHAN İslami İktisat Çerçevesinde Günler: Karma Yöntem Araştırması, ADAM AKADEMİ Sosyal Bilimler Dergisi (Apr 2021).https://doi.org/10.31679/adamakademi.864080Sumit Agarwal, Wenlan Qian, Ruth Tan Saving, (Oct 2020): 29–96.https://doi.org/10.1007/978-981-15-5526-8_2Koryu Sato, Naoki Kondo, Katsunori Kondo Rotating savings and credit association, its members' diversity, and higher‐level functional capacity: A 3‐year prospective study from the Japan Gerontological Evaluation Study, Geriatrics & Gerontology International 19, no.1212 (Nov 2019): 1268–1274.https://doi.org/10.1111/ggi.13798Gebreyesus Abegaz Yimer, Wim Decock, Mehreteab Ghebremeskel Ghebregergs, Gebrehiwot Hadush Abera, Gidey Seyoum Halibo The interplay between official and unofficial laws in rotating savings and credit associations (Eqqub) in Tigray, Ethiopia, The Journal of Legal Pluralism and Unofficial Law 50, no.11 (Jan 2018): 94–113.https://doi.org/10.1080/07329113.2017.1407525Wolfram Manzenreiter Living under more than one sun: The Nikkei Diaspora in the Americas, Contemporary Japan 29, no.22 (Jul 2017): 193–213.https://doi.org/10.1080/18692729.2017.1351045Naoki Kondo, Kokoro Shirai Microfinance and Health, (Jun 2013): 239–275.https://doi.org/10.1007/978-1-4614-7464-7_10Naoki Kondo, Kohta Suzuki, Junko Minai, Zentaro Yamagata Positive and Negative Effects of Finance-based Social Capital on Incident Functional Disability and Mortality: An 8-year Prospective Study of Elderly Japanese, Journal of Epidemiology 22, no.66 (Jan 2012): 543–550.https://doi.org/10.2188/jea.JE20120025 Bibliography, (Jan 2010).https://doi.org/10.4324/9780203935873.bmatt1Naoki Kondo, Junko Minai, Hisashi Imai, Zentaro Yamagata Engagement in a cohesive group and higher-level functional capacity in older adults in Japan: A case of the Mujin, Social Science & Medicine 64, no.1111 (Jun 2007): 2311–2323.https://doi.org/10.1016/j.socscimed.2007.02.009 Mary Kay Gugerty You Can’t Save Alone: Commitment in Rotating Savings and Credit Associations in Kenya Gugerty, Economic Development and Cultural Change 55, no.22 (Jul 2015): 251–282.https://doi.org/10.1086/508716 John E. Akoten / Yasuyuki Sawada / Keijiro Otsuka The Determinants of Credit Access and Its Impacts on Micro and Small Enterprises: The Case of Garment Producers in Kenya Akoten, Sawada, and Otsuka, Economic Development and Cultural Change 54, no.44 (Jul 2015): 927–944.https://doi.org/10.1086/503585Elsa Bawani Satkunasingam, Bala Shanmugam Underground banking in Malaysia: a case study of ROSCAs, Journal of Money Laundering Control 9, no.11 (Jan 2006): 99–111.https://doi.org/10.1108/13685200610645256N. S. Chiteji Promises kept: enforcement and the role of rotating savings and credit associations in an economy, Journal of International Development 14, no.44 (Jan 2002): 393–411.https://doi.org/10.1002/jid.847

The economic adaptation of migrants and the cooperative behavior by generalized exchange : The rotating credit association of Japanese migrants in Buenos Aires

The economic adaptation of migrants and the cooperative behavior by generalized exchange : The rotating credit association of Japanese migrants in Buenos Aires

ETHNIC MINORITY SMALL BUSINESS: A COMPARATIVE ANALYSIS OF RESTAURANTS IN DENVER

Significant ethnic minority business growth has occurred in the United States in the post-World War II period. The self-employment pattern of ethnic minority business, particularly the success of Asian-immigrant small business, is currently explained by two different hypotheses: the social resources explanation and the class resources explanation. While the former approach attributes the large number of small business enterprises and their success to the existence of such social resources as rotating credit associations, a protected market, and a labor source within Asian American communities, the latter argues that success instead is caused by greater investment of human and financial capital by these immigrants. The present study compares the self-employment pattern of the restaurant industry operated by African Americans and immigrant Chinese in Denver. Contrasts and similarities in ownership characteristics, start-up capital, location, soical networks, and economic significance prompted this study to conclude that alone neither explanation is satisfactory and more empirical studies are needed.

Financing small business creation: The case of Chinese and Korean immigrant entrepreneurs

Conventional wisdom claims that entrepreneurship in the United States among Asian immigrants has been substantially promoted by the operation of rotating credit associations specifically and supportive social networks generally. The rotating credit association (RCA) typifies the process whereby supportive peer and community subgroups assist in the creation and operation of firms by providing social capital in the form of loans. One problem with the RCA as an example of social resources is that there is no solid evidence that it is a major source in financing immigrant-owned firms. This study utilizes data from the U.S. Bureau of the Census to analyze sources and amounts of start-up capital that financed small business creation for immigrant Koreans and Chinese. Data self-reported by over 2,000 Korean/Chinese who opened new firms during 1979–1987 are analyzed and compared with start-up statistics for nonminorities and Asian Americans who are not immigrants. The majority of start-up capital that financed small business formation came from family wealth (equity) and financial institution loans (debt). These financing patterns typified all groups. High levels of start-up capital typify Korean/Chinese immigrant-owned firms, reflecting their heavy reliance upon equity capital to finance small business creation. If no loan funds were forthcoming from friends, rotating credit associations, associates, family, and other secondary debt sources, the average Korean/Chinese start-up would nonetheless possess substantially more financial capital than its nonminority cohort. Looking solely at firms utilizing loan funds to finance business creation, Korean/Chinese borrowers had lower mean loan sizes and lower debt to equity ratios than the comparison group firms: the aggregate debt to equity ratios for nonminorities and Chinese/Korean immigrants were 2.75 and 1.18, respectively. Among the borrowing firms, financial institutions skim off the most attractive Korean/Chinese borrowers, mostly college graduates who invest substantial sums of equity capital into their start-ups. The nonbank borrowers—particularly those borrowing from friends—were most disadvantaged, relative to nonminority small business owners. Controlling for firm and owner characteristics statistically, the Korean/Chinese start-ups borrowing from friends and family were found to be penalized by over $25,000 in loan size, relative to nonminorities, whereas Asian nonimmigrant borrowers incurred no such penalty. Prevailing scholarly literature misinterprets the realities of how Korean and Chinese immigrant entrepreneurs finance entry into small businesses. These firms stand out for their particularly heavy reliance upon family wealth. Nontraditional debt capital sources are of secondary importance, and they are utilized more by the weaker start-ups.

The translocation of a West African banking system: The Yoruba Esusu rotating credit association in the anglophone Caribbean

Apres avoir presente les analyses d'Herskovits et de Frazier concernant la survie economique dans les societes africaines, l'A. explique comment et pourquoi le systeme « esusu » (association de credit rotatif) cree en Afrique en l'absence de systeme bancaire a ete transplante aux Caraibes puis aux Etats-Unis. Lors de leur migration, les Africains se mefiant des occidentaux ont maintenu leur systeme d'entraide et ont reetabli leur identite culturelle propre. De meme les immigrants des Caraibes ont conserve le systeme « esusu », element necessaire a la survie economique dans un environnement etranger hostile

Rotating Credit Associations in Nepal:Dhikurias Capital, Credit, Saving, and Investment

Rotating Credit Associations (RCAs) such as Dhikuris, are becoming common among different groups of people in urban as well as rural areas of Nepal today. In this article, cases of Dhikuri among the Loba of Mustang, the Tibetan refugees, and the businesspeople in the urban center of Pokhara are discussed. Besides, examples of revolving fund management among forest user groups in the hills of Nepal are also presented. The case materials make it evident that Dhikuris and similar orgranizations in Nepal have performed different types of roles among various groups of people as instruments of capital, credit, saving, investment, and mutual support or exchange. Since banks have yet to extend their services to meet the needs of most of the people in the country, such informal institutions as the RCAs in Nepal have a vital role to play as subsidiaries to the formal institutions of banking and credit.

Informal Financial Arrangements and the Stability of Deposit Insurance in Less Developed Countries

Deposit insurance first appeared in the State of New York in 1829 to guarantee banknotes and deposits. A number of other states quickly established similar schemes. Some of these schemes were short-lived, as their true cost became known in the panic of 1837, while others were terminated only after the Federal government instituted taxes on banknotes, thereby effectively eliminating all competitors in the currency creation market.' After the Knickerbocker Trust panic of 1907, there was renewed interest in deposit insurance, but only limited adoption. The great depression during the 1930s led to the current system, which is mandatory for banks that are members of the Federal Reserve System and voluntary for some state-chartered banks.2 A formalized deposit insurance system like that in the U.S. is found in only a small number of other countries, with varying degrees of coverage and membership requirements.3 Significant omissions include Panama and Hong Kong, who have large banking sectors in their economies. Accordingly, the role of deposit insurance in the growth of financial intermediaries is fairly ambiguous. One reason that deposit insurance plays a smaller role in developing countries is that they typically suffer from a less diversified economic base, making them more prone to liquidity crises that deposit insurance cannot prevent. Informal financial arrangements, such as savings clubs and rotating credit associations, may be more effective in providing credit than banks or other financial intermediaries, primarily because they do not provide demand deposit accounts and other banking services that may lead to an immediate withdrawal of funds. Informal arrangements often provide for direct renegotiating between borrower and lender. The ability to renegotiate directly with a borrower, not using a bank as an intermediary, provides more liquidity for the lender than a bank offers under similar circumstances because banks must consider the claims of all other

The Changing Significance of Ethnic and Class Resources in Immigrant Businesses: The Case of Korean Immigrant Businesses in Chicago

Contemporary Korean immigrant businesses depart from the traditional patterns of immigrant businesses in two important respects. First, minority areas such as black neighborhoods are more important market places for Korean merchants than their own Korean community. Second, though ethnic solidarity and mutual cooperation among Koreans are still viable in Korean immigrant businesses, class interests and class resources are increasingly important as the basis of Korean immigrant businesses. Therefore, collective approaches to business on the basis of ascriptive ties such as extended kinship or regional ties became irrelevant for the recent Korean immigrants. Instead individualistic approaches become more significant. In order to account for the role of ethnicity and class in contemporary Korean immigrant businesses, this study attempts to assess the relative contribution of ethnic and class resources to Korean immigrant businesses and to examine how the relative significance of ethnic and class resources changes over the course of business development. Empirical results tend to support the arguments that while ethnic resources (i.e., financial resources, information or business advice one can gather from family members, friends or rotating credit associations) are important at the initial stage of business, they become irrelevant or insufficient at the advanced stage, and that class resources (i.e., individual human capital) become more important to determine the success level of business at the advanced stage of business development.