Smart savings circles: trustless rotating savings and credit associations (ROSCAs) on a blockchain

The Rotating Savings and Credit Association (ROSCA) are one of the oldest informal financial institutions that thrives on co-operative pooling of resources dependant on shared trust - typically created by and for a close-knit community and also designed to offer mutual support for the community. A group of individuals agree to contribute a fixed sum regularly, typically on monthly basis, and this establishes a pool of money that others can access. Anthropologist and researcher, Shirley Ardener, gives a more general definition by saying that “ROSCA is an association formed upon a core of participants who agree to make regular contributions to a fund which is given, in whole or in part, to each contributor in a rotation.” At their core, ROSCAs are based on mutual trust, i.e. a group of individuals agrees to contribute a fixed amount of money regularly. Meanwhile, according to Money Helper.or.uk, ROSCAs are sometimes referred to as: “Informal schemes [which] exist under many different na…