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Linking mobile money networks to "e-ROSCAs": An experimental study.
Patrick Francois1,2, Munir Squires3
1Vancouver School of Economics, University of British Columbia, Vancouver, BC, Canada.
Science Advances
|February 1, 2021
Summary
Mobile money networks facilitate successful rotating savings and credit associations (ROSCAs) in the Democratic Republic of the Congo. These e-ROSCAs show high contribution and success rates, offering financial inclusion for the unbanked.
Area of Science:
- Financial Inclusion
- Development Economics
- Mobile Technology in Finance
Background:
- Rotating Savings and Credit Associations (ROSCAs) are informal, peer-to-peer financial groups common in developing nations.
- Mobile money platforms offer a new technological infrastructure for financial transactions.
- The Democratic Republic of the Congo presents a context with significant unbanked populations.
Purpose of the Study:
- To investigate the feasibility and success of using mobile money networks to operate ROSCAs.
- To assess contribution rates and overall success of these electronic ROSCAs (e-ROSCAs).
- To explore the potential of e-ROSCAs for expanding financial services to underserved populations.
Main Methods:
- Study conducted in the Democratic Republic of the Congo.
- Utilized existing mobile money networks to facilitate ROSCA operations.
- Tracked participant contributions and ROSCA completion rates.
Main Results:
- High rates of participant contribution were observed.
- Electronic ROSCAs (e-ROSCAs) demonstrated significant success.
- The study found unexpected efficacy in this model.
Conclusions:
- Mobile money networks provide a viable platform for successful ROSCA operation.
- E-ROSCAs offer a promising avenue for extending financial services to the bankless poor.
- Further research is warranted to explore the full potential and scalability of e-ROSCAs.
