IDEAS home Printed from https://ideas.repec.org/a/taf/jdevst/v47y2011i7p998-1016.html
   My bibliography  Save this article

ROSCAs in Urban Ethiopia: Are the Characteristics of the Institutions More Important than those of Members?

Author

Listed:
  • Abbi Kedir
  • Gamal Ibrahim

Abstract

Using household data from urban Ethiopia, we provide an empirical test of the economic theory of Rotating Savings and Credit Associations (ROSCAs) and identify the impact of ROSCAs and member characteristics on participation and volume of saving. Unlike other studies, we account for the endogeneity of all ROSCA variables. Muslims, individuals who live in richer households, the self-employed, private sector employees and households with large numbers of women are more likely to join ROSCAs. A robust finding is that the savings are significantly affected by the characteristics of the members but not that of the informal saving institution. Some policy implications are discussed.

Suggested Citation

  • Abbi Kedir & Gamal Ibrahim, 2011. "ROSCAs in Urban Ethiopia: Are the Characteristics of the Institutions More Important than those of Members?," Journal of Development Studies, Taylor & Francis Journals, vol. 47(7), pages 998-1016.
  • Handle: RePEc:taf:jdevst:v:47:y:2011:i:7:p:998-1016
    DOI: 10.1080/00220388.2010.536219
    as

    Download full text from publisher

    File URL: http://www.tandfonline.com/doi/abs/10.1080/00220388.2010.536219
    Download Restriction: Access to full text is restricted to subscribers.

    File URL: https://libkey.io/10.1080/00220388.2010.536219?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Seibel, Hans Dieter & Schrader, Heiko, 1999. "From Informal to Formal Finance: The Transformation of an Indigenous Institution in Nepal," Working Papers 1999,1, University of Cologne, Development Research Center.
    2. Abbi M. Kedir & Ibrahim,Gamal, 2012. "Household-Level Credit Constraints in Urban Ethiopia," Ethiopian Journal of Economics, Ethiopian Economics Association, vol. 20(1), September.
    3. Diagne, Aliou & Zeller, Manfred, 2001. "Access to credit and its impact on welfare in Malawi:," Research reports 116, International Food Policy Research Institute (IFPRI).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Stark, Oded & Budzinski, Wiktor & Jakubek, Marcin & Kosiorowski, Grzegorz, 2022. "On the optimal size of a joint savings association," Journal of Comparative Economics, Elsevier, vol. 50(3), pages 804-814.
    2. Getahun Fenta Kebede, 2018. "Social Capital and Entrepreneurial Outcomes: Evidence from Informal Sector Entrepreneurs in Ethiopia," Journal of Entrepreneurship and Innovation in Emerging Economies, Entrepreneurship Development Institute of India, vol. 27(2), pages 209-242, September.
    3. Abbi M. Kedir & Ibrahim,Gamal, 2012. "Household-Level Credit Constraints in Urban Ethiopia," Ethiopian Journal of Economics, Ethiopian Economics Association, vol. 20(1), September.
    4. María José Roa García & Diana Mejía (ed.), 2018. "Decisiones financieras de los hogares e inclusión financiera: evidencia para América Latina y el Caribe," Investigación Conjunta-Joint Research, Centro de Estudios Monetarios Latinoamericanos, CEMLA, edition 1, volume 1, number 7sp, December.
    5. 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.
    6. Getahun Fenta Kebede, 2020. "Network Locations or Embedded Resources? The Effects of Entrepreneurs’ Social Networks on Informal Enterprise Performance in Ethiopia," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 11(2), pages 630-659, June.
    7. Thomas Gries & Ha van Dung, 2014. "Household Savings and Productive Capital Formation in Rural Vietnam: Insurance vs. Social Network," Working Papers CIE 81, Paderborn University, CIE Center for International Economics.
    8. Ha van Dung, 2014. "Short-term precaution, insurance and saving mechanisms in rural Vietnam," Working Papers CIE 82, Paderborn University, CIE Center for International Economics.
    9. Sedai, Ashish Kumar & Vasudevan, Ramaa & Alves Pena, Anita, 2021. "Friends and benefits? Endogenous rotating savings and credit associations as alternative for women’s empowerment in India," World Development, Elsevier, vol. 145(C).
    10. Ana María Iregui-Bohórquez & Ligia Alba Melo-Becerra & María Teresa Ramírez-Giraldo & Ana María Tribín-Uribe, 2018. "Determinants of Formal and Informal Saving in Colombia," Investigación Conjunta-Joint Research, in: María José Roa García & Diana Mejía (ed.), Financial Decisions of Households and Financial Inclusion: Evidence for Latin America and the Caribbean, edition 1, volume 1, chapter 4, pages 95-123, Centro de Estudios Monetarios Latinoamericanos, CEMLA.
    11. Ana María Iregui-Bohórquez & Ligia Alba Melo-Becerra & María Teresa Ramírez-Giraldo & Ana María Tribín-Uribe, 2018. "Factores determinantes del ahorro formal e informal en Colombia," Investigación Conjunta-Joint Research, in: María José Roa García & Diana Mejía (ed.), Decisiones financieras de los hogares e inclusión financiera: evidencia para América Latina y el Caribe, edition 1, volume 1, chapter 4, pages 101-131, Centro de Estudios Monetarios Latinoamericanos, CEMLA.
    12. M. Shahe Emran & A. K. M. Mahbub Morshed & Joseph E. Stiglitz, 2021. "Microfinance and missing markets," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 54(1), pages 34-67, February.
    13. Ana María Iregui-Bohórquez & Ligia Alba Melo-Becerra & María Teresa Ramírez-Giraldo & Ana María Tribín-Uribe, 2016. "Ahorro de los hogares de ingresos medios y bajos de las zonas urbana y rural en Colombia," Borradores de Economia 960, Banco de la Republica de Colombia.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Tchale, H. & Sauer, J., 2007. "Soil Fertility Management and Agricultural Productvity in Malawi," Proceedings “Schriften der Gesellschaft für Wirtschafts- und Sozialwissenschaften des Landbaues e.V.”, German Association of Agricultural Economists (GEWISOLA), vol. 42, March.
    2. Renata Baborska & Emilio Hernandez & Emiliano Magrini & Cristian Morales-Opazo, 2020. "The impact of financial inclusion on rural food security experience: A perspective from low-and middle-income countries," Review of Development Finance Journal, Chartered Institute of Development Finance, vol. 10(2), pages 1-18.
    3. Conning, Jonathan & Udry, Christopher, 2007. "Rural Financial Markets in Developing Countries," Handbook of Agricultural Economics, in: Robert Evenson & Prabhu Pingali (ed.), Handbook of Agricultural Economics, edition 1, volume 3, chapter 56, pages 2857-2908, Elsevier.
    4. Koomson, Isaac & Annim, Samuel Kobina & Peprah, James Atta, 2014. "Loan Refusal, Household Income and Savings in Ghana," MPRA Paper 58049, University Library of Munich, Germany.
    5. Paramasivam Ramasamy & Umanath Malaiarasan, 2023. "Agricultural credit in India: determinants and effects," Indian Economic Review, Springer, vol. 58(1), pages 169-195, June.
    6. Emmanuel Tetteh Jumpah & Abdulai Adams, 2020. "Resolving the Constraints in Accessing Microcredit: The Neglected Views of the Smallholder Farmers," International Journal of Social and Administrative Sciences, Asian Economic and Social Society, vol. 5(1), pages 1-15, March.
    7. Mahoukede, Kinkingninhoun-Medagbe & Aliou, Diagne & Gauthier, Biaou, 2015. "Impact of Use of Credit in rice farming on rice Productivity and Income in Benin," 2015 Conference, August 9-14, 2015, Milan, Italy 211635, International Association of Agricultural Economists.
    8. Ashraf Nava & Karlan Dean & Yin Wesley, 2006. "Deposit Collectors," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 6(2), pages 1-24, March.
    9. Paswel P. Marenya & Christopher B. Barrett, 2009. "Soil quality and fertilizer use rates among smallholder farmers in western Kenya," Agricultural Economics, International Association of Agricultural Economists, vol. 40(5), pages 561-572, September.
    10. Garrett, James, 2004. "Living life," FCND discussion papers 171, International Food Policy Research Institute (IFPRI).
    11. Simtowe, Franklin, 2009. "Is relaxing equity constraints panacea for Malawi’s green gold expansion? A fuzzy regression discontinuity design approach," MPRA Paper 17065, University Library of Munich, Germany.
    12. Simtowe, Franklin & Zeller, Manfred, 2006. "The Impact of Access to Credit on the Adoption of hybrid maize in Malawi: An Empirical test of an Agricultural Household Model under credit market failure," MPRA Paper 45, University Library of Munich, Germany.
    13. Makuluni Fatso E. & Dunga Hannah Mayamiko, 2022. "The Impact of Access to Credit on Welfare Inequality in Malawi," Studia Universitatis Babeș-Bolyai Oeconomica, Sciendo, vol. 67(2), pages 50-66, August.
    14. Ralitza Dimova & Ira N. Gang, 2015. "Female Engagement in Commercial Agriculture, Interventions and Welfare in Malawi: What Works for the Poorest?," Departmental Working Papers 201522, Rutgers University, Department of Economics.
    15. Rochelle Holm & Wales Singini & Simeon Gwayi, 2016. "Comparative evaluation of the cost of water in northern Malawi: from rural water wells to science education," Applied Economics, Taylor & Francis Journals, vol. 48(47), pages 4573-4583, October.
    16. Alwang, Jeffrey & Puhazhendhi, V., 2002. "The impact of the International Food Policy Research Institute's research program on rural finance policies for food security for the poor," Impact assessments 16, International Food Policy Research Institute (IFPRI).
    17. Hazarika, Gautam & Guha-Khasnobis, Basudeb, 2008. "Household Access to Microcredit and Children's Food Security in Rural Malawi: A Gender Perspective," IZA Discussion Papers 3793, Institute of Labor Economics (IZA).
    18. Chitralada Chaiya & Sikandar Sikandar & Pichate Pinthong & Shahab E. Saqib & Niaz Ali, 2023. "The Impact of Formal Agricultural Credit on Farm Productivity and Its Utilization in Khyber Pakhtunkhwa, Pakistan," Sustainability, MDPI, vol. 15(2), pages 1-14, January.
    19. Bhandari, Humnath & Pandey, Sushil, 2006. "Economics of Groundwater Irrigation in Nepal: Some Farm-Level Evidences," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 38(1), pages 1-15, April.
    20. Daniel Ayalew Ali & Klaus Deininger & Marguerite Duponchel, 2014. "Credit Constraints and Agricultural Productivity: Evidence from rural Rwanda," Journal of Development Studies, Taylor & Francis Journals, vol. 50(5), pages 649-665, May.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:jdevst:v:47:y:2011:i:7:p:998-1016. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/FJDS20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.