In this paper, we examine a particular form of informal financial institution, the Rotating Saving Credit Association (ROSCA), more popularly known as Kameti, Kuri, Chitty, Chit funds, Vishi, Bishi, Nidhi in different parts of India. A rosca is a revolving financial scheme where a group of individuals comes together to borrow and invest funds. In a developing country like India, Rosca serves as an important informal institution for people who either do not have access to the formal sector or are beleaguered by its insurmountable formalities, or find roscas more attractive options from an investment point of view. Working with a sample of 36 completed discount bidding roscas from two villages in Delhi involving 450 rosca participants, we provide a thorough examination of issues relating to roscas. The importance of this study may be viewed in the context of efforts of the present regime towards financial inclusion and greater formalization of the financial sector, in particular, the advancement of the Pradhan Mantri Jan Dhan Yojana (PMJDY).
rotating saving credit association, informal credit markets, bidding rosca, returns
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