Payment arrears in rotating savings and credit associations: empirical analysis of Cameroonian RoSCAs

J. Ndjeunga, A. Winter-Nelson

Research output: Contribution to journalArticlepeer-review

Abstract

Rotating savings and credit associations (RoSCAs) are well known for thier low transactions costs, high recovery rates, and ubiquity. However, the complexity and diversity of RoSCAs is often overlooked in formal modeling and in policy discussions. Using data from the records of 58 RoSCAs operating in urban Cameroon this paper provides evidence of the range of financial contracts available through RoSCAs and of uneven performance among associations. Further data from a survey of RoSCAs participants indicates that individuals develop diversified portfolios by participating in multiple financial institutions. Statistical analysis reveals correlation between institutuional features, such as the provision of insurance within the RoSCA, and payment delinquency. While all the RoSCAs surveyed achieve high rates of loan recovery, differences in rates of arrears indicate issues for consideration in the design of formal financial institutions.

Original languageEnglish (US)
Pages (from-to)87-105
Number of pages19
JournalSavings and Development/African Review of Money Finance and Banking
VolumeSuppl.1-2
StatePublished - Dec 1 1997
Externally publishedYes

ASJC Scopus subject areas

  • Environmental Science(all)
  • Earth and Planetary Sciences(all)

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