Are ROSCAs providing an alternative funding source for poor?

Abstract

This paper looks into ROSCAs as funding source for the poor. The evidence from the ROSCAs in Pakistan (Dera Ghazi Khan) suggests that regular incomes are essential for the smooth functioning of ROSCAs therefore ROSCA is popular among salaried classes. Poor people usually have insufficient and irregular incomes due to which they are considered trouble makers and therefore are excluded from the ROSCAs. In conclusion ROSCAs cannot provide funding for the poor people and thus cannot substitute microfinance.

Key Words: ROSCAs, poverty alleviation, finance, developing countries, Pakistan