ROSCAs in Uganda: beyond economic rationality?

Lisa Peterlechner
African Review of Money Finance and Banking 2009, pp. 109-140

This article studies why people join Roscas. Both economic and social motivations are taken into account. Theoretical hypotheses about why people join are tested empirically against the results of a field study in Eastern Uganda. It is found that the Roscas in the sample are economically rational in the context of an inadequate formal financial sector. It is also found that their social value plays an important part both in the efficiency of Roscas and in the motivation of their members. The strength of Roscas seems to lie in the combination of economic rationality and social value. The two are interdependent and reinforce each other.

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Issue: 2009
Contributors: Peterlechner, Lisa   
Keywords: , , , , ,