Most of the world’s poor have limited access to formal banking. The closest they come to borrowing in an institutionalized setting is via rotating savings and credit associations (ROSCAs), which are ubiquitous across the developing world (1–4).
ROSCAs meet regularly, require from each member a contribution amount at the meeting, and disperse summed contributions (the pot) to a single member. At the next meeting, which all must attend, members who have received the pot are excluded from receiving again but are required to contribute. This continues until all members have had a turn to receive the pot. ROSCAs are successful, or so it is believed, because of regular monitoring and selection among their members and the exertion of social pressure to ensure compliance (5).
Mobile money networks have become widespread in the developing world. However, these primarily…