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The Anatomy of an Informal Financial Market: Rosca Participation in Taiwan
Aug 01, 1995
Alec R. Levenson and Timothy Besley



Little is known about informal financial markets in developing countries. This paper analyzes participation in rotating savings and credit associations using a national household survey from Taiwan.

We find that participation is highest among high-income households. There is some evidence that income stability may play a role as well. Life cycle differences suggest a role in funding durables purchases.

Our evidence indicates that roscas may be an alternative savings device to the formal financial sector.