Rosca Participation And Its Role In Financial Crunches Of The Households In District Peshawar

Abstract

Participation in the informal institution for the credit generation or for saving as ROSCA is very common in developing countries including Pakistan. Despite of the fact that participation in ROSCA is costly in terms of opportunity cost of time spent in meeting and there is risk of non-payments by the participants as well. The objectives of this study were to know about the gender variation contributing in ROSCA, to evaluate the socio-economic and financial motives for which people participated in ROSCA. Further his study tried to determine the problems that individuals faced because of financial crunches in households and role of ROSCA in minimizing such problems. Through snowball sampling primary data were collected from 166 ROSCA’S members. Data was analyzed using both descriptive statistics and estimating of econometrics models.  The findings shown that there exist very little variation among men and women in participation in ROSCA. The findings revealed that individuals participated in ROSCA to have the personal need expenses such as repairing of house, children’s wedding and to spend on own choices of goods  and another motive to help financially the family members, peers, to have the commodities of own choice and to meet the health expenditures. The regression results revealed that marital status, own education and expenses of personal needs are significant and negatively related and age and health expenditures of own and family or relatives are significant and show positive relation. The findings revealed that before members joined ROSCA, they were not able to spend on many things such as buying house assets, consumption goods health expenditures and for unseen events. The study therefore, came up with a conclusion that, ROSCAs proved to be a great tool in improving the lives of the people. The study suggested in the recommendations that awareness must create in the youngsters for encouraging them to participate in ROSCAS for education purpose, further training and education should give to the members to decrease the defaulting  rate, create most opportunities for women to empower them and government should formulate such policies that facilitate ROSCA operation for their sustainability.