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ROSCAs THROUGH THE ISLAMIC COMMUNITY: AN ALTERNATIVE TO ENHANCING ENTREPRENEURSHIP AND WEALTH

Author

Listed:
  • Galuh Tri Pambekt

    (Islamic State University of Sunan Kalijaga, Indonesia)

  • Rizaldi Yusfiarto

    (Islamic State University of Sunan Kalijaga, Indonesia)

  • Septy Setia Nugraha

    (Diponegoro University, Indonesia)

Abstract

The purpose of the study is to analyse the influence of the motives and benefits of participation in Rotating Savings and Credit Associations (ROSCAs) on household wealth and entrepreneurship through mediating community commitment. Structural equation modeling (SEM) was used on the data collected using purposive sampling and a sample of 225 respondents in the provinces of East Java, Central Java, West Java, D.I. Yogyakarta, and D.K.I. Jakarta. The results show that ROSCAs have a direct effect on entrepreneurial intention and may affect household wealth. It is also concluded that ROSCAs can be an instrument of Islamic social finance, as their characteristics are not burdensome to members. They involve the principle of cooperation, and are not affected by interest rates or inflation.

Suggested Citation

  • Galuh Tri Pambekt & Rizaldi Yusfiarto & Septy Setia Nugraha, 2022. "ROSCAs THROUGH THE ISLAMIC COMMUNITY: AN ALTERNATIVE TO ENHANCING ENTREPRENEURSHIP AND WEALTH," Bulletin of Monetary Economics and Banking, Bank Indonesia, vol. 8(Special I), pages 81-106, December.
    • Handle: RePEc:idn:journl:v:8:y:2022:i:sid:p:81-106
    DOI: https://doi.org/10.21098/jimf.v8i0.1371
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    More about this item

    Keywords

    ROSCAs; Community commitment; Household wealth; Entrepreneurial intention;
    All these keywords.

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • O35 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Social Innovation
    • P35 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - Public Finance

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