Analysis and design of microfinance services: A case of ROSCA
2016; Taylor & Francis; Volume: 62; Issue: 3 Linguagem: Inglês
10.1080/0013791x.2016.1236305
ISSN1547-2701
AutoresDohyun Ahn, Wanmo Kang, Kyoung-Kuk Kim, Hayong Shin,
Tópico(s)Islamic Finance and Banking Studies
ResumoRotating savings and credit association (ROSCA) is a well-known microfinance association widely used in many countries around the world with long histories. By considering extra profits that such a system can provide when compared to banking transactions, we develop optimization problems to achieve an optimal design of a ROSCA. We find that ROSCAs might attract investors when deposit and loan rates from formal banking systems are not favorable. Furthermore, optimal rates and optimal orders to maximize system outputs are reported.
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