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Informal Saving Organizations in Pakistan

Author

Listed:
  • Muhammad Saqib
  • Sajjad Ahmad
  • Naila Nazir

Abstract

Pakistan is a developing country. The credit associations here are not well established. The means of saving still needs proper attention of authorities to improve it. That’s why people are not attracted to formal organizations. They usually try to save in informal organizations. In the same way the present study also focuses to find the reasons how informal saving groups like ROSCA (Rotating Saving and Credit Associations) are much popular in the rural areas of Pakistan. Many researchers have done their valuable works inside and outside the Pakistan from different angles but this study attempts from another angle and provides new hypothesis to the readers. Cross sectional data has been collected through questionnaire from the people living in rural areas of Pakistan. Salaried class and self employed class are interviewed separately. The data has been analyzed by a simple linear regression model. The empirical results of the study show that ROSCA is much popular in both salaried and self employed classes. Variables taken enter the model statistically significant showing the reasons that how informal self help groups are popular in the study area.

Suggested Citation

  • Muhammad Saqib & Sajjad Ahmad & Naila Nazir, 2017. "Informal Saving Organizations in Pakistan," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 7(8), pages 388-397, August.
    • Handle: RePEc:hur:ijarbs:v:7:y:2017:i:8:p:388-397
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    References listed on IDEAS

    as
    1. Besley, Timothy & Coate, Stephen & Loury, Glenn, 1993. "The Economics of Rotating Savings and Credit Associations," American Economic Review, American Economic Association, vol. 83(4), pages 792-810, September.
    2. Olivier Dagnelie & Philippe Lemay‐Boucher, 2012. "Rosca Participation in Benin: A Commitment Issue," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 74(2), pages 235-252, April.
    3. Seibel, Hans Dieter & Schrader, Heiko, 1999. "From Informal to Formal Finance: The Transformation of an Indigenous Institution in Nepal," Working Papers 1999,1, University of Cologne, Development Research Center.
    4. Gugerty, Mary Kay, 2007. "You Can't Save Alone: Commitment in Rotating Savings and Credit Associations in Kenya," Economic Development and Cultural Change, University of Chicago Press, vol. 55(2), pages 251-282, January.
    5. Handa, Sudhanshu & Kirton, Claremont, 1999. "The economics of rotating savings and credit associations: evidence from the Jamaican 'Partner'," Journal of Development Economics, Elsevier, vol. 60(1), pages 173-194, October.
    6. Muhammad Farooq Arby & Muhammad Jahanzeb Malik & Muhammad Nadim Hanif, 2010. "The Size of Informal Economy in Pakistan," SBP Working Paper Series 33, State Bank of Pakistan, Research Department.
    7. Levenson, Alec R. & Besley, Timothy, 1996. "The anatomy of an informal financial market: Rosca participation in Taiwan," Journal of Development Economics, Elsevier, vol. 51(1), pages 45-68, October.
    8. Mary Kay Gugerty, 2007. "You Can't Save Alone: Commitment in Rotating Savings and Credit Associations in Kenya," Economic Development and Cultural Change, University of Chicago Press, vol. 55, pages 251-282.
    9. Olivier Dagnelie & Philippe LeMay-Boucher, 2007. "ROSCA Participation in Benin: A Commitment Issue," CERT Discussion Papers 0708, Centre for Economic Reform and Transformation, Heriot Watt University.
    10. Timothy Besley & Stephen Coate & Glenn Loury, 1994. "Rotating Savings and Credit Associations, Credit Markets and Efficiency," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 61(4), pages 701-719.
    Full references (including those not matched with items on IDEAS)

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