How rotational saving works
A rural savings and credit system of pure genius.
In rural Uganda, women groups formed with mutual trust, are implementing a rolling banking system which allows them to save and borrow within themselves simultaneously.
So it is called, the system involves all members contributing a designated amount of money and lending the whole bunch to one individual. The designated amount, x, is a manageable target, which the women can afford to save in a short time span such as a week or a month. However when combined the resultant sum, nx; say 30x, is a large amount which can be an effective loan to the woman receiving it.
And forth it rolls…
As in a circle, the next woman gets this loan and so forth, until all women have a managed to save 30x in a period of 30 weeks/months, and managed to get a loan of that equivalency at some point along the circle.
Sounds like a cool game?
Like any board game commercial, let’s describe some rules of gameplay:
- The order in which participants receive the loans is random and selected before beginning the cycle.
- Mutual trust is the insurance that someone who gets a loan early won’t run off and stop making savings.
- Men are allowed too.
Rotational savings in MyFy
We marvel at the genius of this system and turn to it to facilitate financing for entrepreneurs.