Moving from Rags -- to -- Riches: Together or Alone? Underground cooperative savings: An Ethnography of Workplace Rotating Savings & Credit Associations (ROSCAs)

This ethnography studies workplace Rotating Savings and Credit Associations (ROSCAs), which are associations of participants who agree to make regular contributions to a fund that participants then distribute, in whole or in part, to each contributor in rotation. Workplace ROSCAs are a departure from more traditional immigrant community and kinship-based models. This study explores how workplace ROSCAs, which receive little mention in the financial inclusion literature, are similar and different from community or kinship-based ROSCAs; how participants interact with other components of the consumer financial services industry; and whether a wider range than expected of lower and middle-income participants use workplace ROSCAs to build assets.;Five themes emerged from this ethnography related to workplace ROSCA users, uses, benefits, differences, and participants. Seven findings were discovered from the five themes. First, workplace ROSCAs are more widely used and historically established than indicated in the literature. Second, immigrants brought both workplace and traditional ROSCAs to the United States after their successful use in their country of origin. Third, workplace ROSCA users are diverse and have established credit. This finding contradicts the three established assumptions in the literature (that the poor, women, and those that are credit constrained are the predominant users of ROSCAs). Fourth, workforce and traditional ROSCAs are used for similar purposes that are predominately related to asset-building. Fifth, workplace ROSCA users want their short-term savings to be out of their reach and shielded from both temptations and kinship networks. Sixth, participants perceived workplace ROSCAs as slightly less risky, slightly less dependent on trust than their traditional counterparts, and a vehicle for increased financial security. Seventh, workforce ROSCA users view themselves as fully banked, while policy makers classify ROSCA users as underbanked. This research provides insight into workplace ROSCAs and recommends policy recognition and validation of this established alternative savings product and asset building tool.