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ROSCAs as Lenders of Last Resort after Financial Crises: Lessons from Indonesia

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  • Joseph Kofi Acquah
  • Roshani Dahal

Abstract

This study investigated the lending capabilities of Rotating Savings and Credit Association (ROSCA) institutions in the 2 years following the 1998 Indonesian financial crisis. We found that lending increased threefold and resulted in 2 percent of ROSCA members securing ROSCA loans. Loans were small (US$28.8) with 92 percent of loan recipients reporting that they knew no other place to borrow. Factors that positively influenced lending capacities of ROSCA loans were ROSCA size (30–43 members) and diversity in employment sectors of ROSCA members. Additionally, members that participated in multiple ROSCAs and experienced hardships in 1998 were more likely to receive ROSCA loans. Copyright © 2018 John Wiley & Sons, Ltd.

Suggested Citation

  • Joseph Kofi Acquah & Roshani Dahal, 2018. "ROSCAs as Lenders of Last Resort after Financial Crises: Lessons from Indonesia," Journal of International Development, John Wiley & Sons, Ltd., vol. 30(7), pages 1223-1239, October.
    • Handle: RePEc:wly:jintdv:v:30:y:2018:i:7:p:1223-1239
    DOI: 10.1002/jid.3366
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    Cited by:

    1. Stark, Oded & Budzinski, Wiktor & Jakubek, Marcin & Kosiorowski, Grzegorz, 2022. "On the optimal size of a joint savings association," Journal of Comparative Economics, Elsevier, vol. 50(3), pages 804-814.
    2. Harald Strotmann & Jürgen Volkert & Melinda Schmidt, 2019. "Multinational companies: can they foster well-being in the eyes of the poor? Results from an empirical case study," International Journal of Corporate Social Responsibility, Springer, vol. 4(1), pages 1-14, December.
    3. Sedai, Ashish Kumar & Vasudevan, Ramaa & Alves Pena, Anita, 2021. "Friends and benefits? Endogenous rotating savings and credit associations as alternative for women’s empowerment in India," World Development, Elsevier, vol. 145(C).

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