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

Joseph Kofi Acquah and Roshani Dahal

Journal of International Development, 2018, vol. 30, issue 7, 1223-1239

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.

Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:wly:jintdv:v:30:y:2018:i:7:p:1223-1239

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