ROSCAs and Credit Unions: Is Modern Japan Missing Something?

Stephen J. Davies
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Stephen J. Davies: Kobe University

Kobe Economic & Business Review, 2004, vol. 48, 73-93

Abstract: This paper discusses two forms of "microfinance ", both of which are common in some other parts of the world but almost entirely lacking in modern Japan. The Rotating Credit and Saving Association (R0SCA) had a long history in Japan in the form of the kou or mujin, and remained important until after the Second World War, but has almost completely disappeared from Japan in the last fifty years. The community-based credit union, which has in many deve1oped countries become an important source of small-scale unsecured finance for households, with millions of members, in Japan remains almost entirely confined to Roman Catholic parishes, with a total membership now of less than 5,000. This anomalous lack of community-based microfinance in Japan is at least in part a consequence of the privileged status of the postal savings system and of government guarantees of bank deposits.

Keywords: Microfinance; ROSCAs; Credit unions (search for similar items in EconPapers)
JEL-codes: G20 G28 N20 (search for similar items in EconPapers)
Date: 2004
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