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Leveraging informal lending mechanisms to facilitate technology transfer and microenterprise in developing countries

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  • Hansen, Kory
  • Kim, Jin Ju
  • Suffian, Stephen
  • Mehta, Khanjan

Abstract

This article discusses how Rotating Savings and Credit Associations (ROSCAs or merry-go-rounds) can concurrently overcome four challenges faced by small enterprises in developing communities: access to financial capital, technology transfer, vertical and lateral knowledge transfer, and reliable market linkages. Based on primary data from Kenya, three models of partnership between ROSCAs and diverse external organizations are presented and compared against each other. These approaches are designed to help ROSCA groups engage in small enterprises, while creating business opportunities for agricultural technology manufacturers and the formal banking industry. The ultimate purpose of such collaborations is to improve rural livelihoods, strengthen food value chains, and foster food security.

Suggested Citation

  • Hansen, Kory & Kim, Jin Ju & Suffian, Stephen & Mehta, Khanjan, 2015. "Leveraging informal lending mechanisms to facilitate technology transfer and microenterprise in developing countries," Technology in Society, Elsevier, vol. 41(C), pages 65-75.
    • Handle: RePEc:eee:teinso:v:41:y:2015:i:c:p:65-75
    DOI: 10.1016/j.techsoc.2014.12.001
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    References listed on IDEAS

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    1. Siwan Anderson & Jean-Marie Baland, 2002. "The Economics of Roscas and Intrahousehold Resource Allocation," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 117(3), pages 963-995.
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    3. Pietro Calice & Victor M. Chando & Sofiane M. Sekioua, 2012. "Working Paper 146 - Bank Financing to Small and Medium Enterprises in East Africa: Findings of a Survey in Kenya, Tanzania, Uganda and Zambia," Working Paper Series 377, African Development Bank.
    4. Céline Kauffmann, 2005. "Financing SMEs in Africa," OECD Development Centre Policy Insights 7, OECD Publishing.
    5. Miriam Bruhn & Dean Karlan & Antoinette Schoar, 2010. "What Capital Is Missing in Developing Countries?," American Economic Review, American Economic Association, vol. 100(2), pages 629-633, May.
    6. repec:ucp:ecdecc:v:47:y:1998:i:1:p:45-71 is not listed on IDEAS
    7. Bouman, F. J. A., 1995. "Rotating and accumulating savings and credit associations: A development perspective," World Development, Elsevier, vol. 23(3), pages 371-384, March.
    8. Contractor, F. J. & Lorange, P., 2002. "The growth of alliances in the knowledge-based economy," International Business Review, Elsevier, vol. 11(4), pages 485-502, August.
    9. Siwan Anderson & Jean-Marie Baland, 2002. "The Economics of Roscas and Intrahousehold Resource Allocation," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 117(3), pages 963-995.
    10. repec:aer:wpaper:111 is not listed on IDEAS
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    Cited by:

    1. Paudel, Gokul P. & KC, Dilli Bahadur & Rahut, Dil Bahadur & Khanal, Narayan P. & Justice, Scott E. & McDonald, Andrew J., 2019. "Smallholder farmers' willingness to pay for scale-appropriate farm mechanization: Evidence from the mid-hills of Nepal," Technology in Society, Elsevier, vol. 59(C).
    2. Emmanuel, Bukuwa Nambale, 2022. "The determinants of participation in savings groups and the impact on input investment among smallholder farmers in Sironko district, Uganda," Research Theses 334746, Collaborative Masters Program in Agricultural and Applied Economics.

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