Rotating savings and credit associations in Bolivia

Rotating savings and credit associations (RoSCAS) have been studied in many low income countries, but relatively little published information is available about them in Latin America. RoSCAS are informal arrangements through which groups of individuals save, share risks, and also borrow. In mid-1987, we studied RoSCAS in five of the largest cities in Bolivia through interviews with participants as well as with organizers. We found that a sizable portion of the urban-adults in Bolivia are, or have been, members of RoSCAS - one-third or more. We also found that a surprisingly high proportion of the employees in formal financial institutions regularly participated in RoSCAS. Three types of RoSCAS were found: simple office types, groups that were managed by professional organizers who received a commission, and promotional RoSCAS that were used to sell merchandise. Extensive participation in RoSCAS suggests that Bolivians are eager and willing to save in financial forms, even when inflation is nearly overwhelming. RoSCAS appear to offer some major advantages to members that are not offered by formal financial institutions. -from Authors