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An Assessment of the Operations of Rotational Savings and Credit Association in the Kumasi Metropolis, Ghana

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  • Joseph Owusu1

    (Department of Marketing and Corporate Strategy, School of Business, Kwame Nkrumah University of Science & Technology Kumasi- Ghana, Kumasi – Ghana W/A)

  • Emmanuel Kwabena Anin

    (Department of Information Systems and Decision Science, School of Business Kwame Nkrumah University of Science & Technology Kumasi, Ghana)

  • Solomon Gbene Zaato

    (Department of, Marketing and Corporate Strategy, School of Business, Kwame Nkrumah University of Science & Technology Kumasi- Ghana)

Abstract

Small and medium scale enterprises (SMEs) play significant roles in socio economic development of every country in the world and serve as an important source of job creation and innovation. Despite their significant contributions to the economy, access to funding is a challenge to traders within the informal sector in Ghana. These challenges negatively affect the businesses within the informal sector of the economy. As a result, Rotational Savings and Credit Associations (ROSCA) becomes the most easiest and available alternative through which most of these traders raise funds to support their business operations. This study aims at examining the operations of ROSCA in the Kumasi Metropolis, Ghana. The study adopted survey strategy using a mix of quantitative and qualitative methods, although the focus was more on quantitative. Primary data was also used for the study. The study revealed that, Capital Expansion appears to be the major reason that influences individuals’ decision to join the Rotational Savings and Credit Association. Information from the study also showed that on the average, ten (10) people constitute the membership of various Rotational Savings and Credit Association within the study setting. Balloting was found to be the major criteria used by Rotational Savings and Credit Associations to determine the turn of each member in terms of disbursing the accumulated funds to their membership.

Suggested Citation

  • Joseph Owusu1 & Emmanuel Kwabena Anin & Solomon Gbene Zaato, 2013. "An Assessment of the Operations of Rotational Savings and Credit Association in the Kumasi Metropolis, Ghana," International Journal of Business and Social Research, MIR Center for Socio-Economic Research, vol. 3(7), pages 150-159, July.
    • Handle: RePEc:mir:mirbus:v:3:y:2013:i:7:p:150-159
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    References listed on IDEAS

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    1. Aryeetey, Ernest & Udry, Christopher, 1997. "The Characteristics of Informal Financial Markets in Sub-Saharan Africa," Journal of African Economies, Centre for the Study of African Economies, vol. 6(1), pages 161-203, March.
    2. Alexander Cobham, "undated". "Making Bad Decisions: firm size and investment under uncertainty," QEH Working Papers qehwps39, Queen Elizabeth House, University of Oxford.
    3. Ambec, Stefan & Treich, Nicolas, 2007. "Roscas as financial agreements to cope with self-control problems," Journal of Development Economics, Elsevier, vol. 82(1), pages 120-137, January.
    4. Chamlee-Wright, Emily, 2002. "Savings and Accumulation Strategies of Urban Market Women in Harare, Zimbabwe," Economic Development and Cultural Change, University of Chicago Press, vol. 50(4), pages 979-1005, July.
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    Cited by:

    1. AMANKWAH, ERNEST & Gockel, Fritz Augustine & Osei-Assibey, Eric, 2019. "Pareto Superior dimension of Rotating Savings and Credit Associations (ROSCAs) in Ghana: Evidence from Asunafo North Municipality of Ghana," MPRA Paper 96308, University Library of Munich, Germany.

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