Rotatory Savings and Credit Associations (ROSCAs) are a popular mode of saving in Pakistan. In local parlance, they are called “committees” and are particularly popular among women. ROSCA group members make a set contribution to a fund and one of the members of the group gets the pool of funds through a draw or mutual consensus of the members. This process is repeated until everyone in the group gets one pooled payment. Record-keeping practices among ROSCAs might vary, but, generally, record keeping is conducted in an informal manner.

InterMedia’s Financial Inclusion Insights (FII) Pakistan Tracker survey report for 2013[1] revealed some interesting insights about ROSCA groups: 9.3 percent of respondents reported using ROSCAs. Of these, 91 percent confirmed to use a monthly cycle. Reported contributions varied from $0.09 to $470.20, with an average amount of $17.96.

The ROSCA is based on a sense of trust. The collateral, in case of a default in contribution payments, is the goodwill that exists among its members. As a result, the assumption might be that the incidence of defaults, or fraud, for example, is low. However, negative experiences reported during members’ time with ROSCAs include fraud, disagreements as well as payment defaults, according to FII 2015 data.

Figure 1

(Source: FII 2015 Pakistan Tracker survey, September-October 2015)

Figure 1 highlights some of the common problems faced by ROSCA members. Understanding these problems requires thinking about the archaic nature of these transactions, which, for the most part, are in-person cash transfers. Based on FII 2015 data, 99.9 percent of ROSCA users responded in the negative when asked about the use of banks or mobile wallets to conduct transactions.  

The absence of a financial trail leaves these individuals vulnerable to various undesirable situations. For instance, if a ROSCA member claims to have paid his/her contribution to the  group leader, in person, and the group leader denies receiving such a payment, then, in the absence of receipts, there is no way for either to prove their claims. These types of problems are not uncommon, and clearly point to the need for some financial documentation to verify transactions and improve transparency.

Using banks to transact is one option. However, transacting through banks might prove cumbersome given the effort required. Figure 2 compares the effort required to conduct ROSCA transactions with a group leader versus bank transactions. It can be concluded from these numbers that engaging with ROSCAs through bank accounts would be much more problematic compared with the current method of access, as a bank tends to be farther away than a ROSCA group leader.

Figure 2

(Source: FII 2015 Pakistan Tracker survey, September-October 2015)

When convenience is factored into the ability to make these transactions, mobile money accounts become the obvious choice. Lack of mobile phone ownership will not pose a problem in making this transition: FII 2015 data showed 60 percent of ROSCA users had their own mobile phones. However, operating a mobile money account could prove to be a tedious task considering, of those who had a mobile phone, 71 percent had never sent an SMS, a key factor in determining an individual’s potential for using a mobile money account.

Given the implied difficulties with text based mediums, a solution might lie in leveraging smartphones for more intuitive, human-centered app designs. Experiments have shown that illiterate users find smartphones easier to understand than feature phones.[2] In a research paper from IBM India, Agarwal et al observed that combining smartphone graphics with voice communication can be effective in reaching the illiterate or technically illiterate demographics.[3]    

The high price of smartphones has traditionally been a barrier to their adoption. However, with falling smartphone prices, as well as the introduction of 3G and 4G broadband services, the demand for smartphones is increasing. According to one estimate, Pakistan is likely to have 40 million smartphones by the end of 2016.[4] FII data also indicate an upward trend in smartphone ownership: in 2013, 3.3 percent of the respondents owned a smartphone; in 2015, the percentage increased to 6.0 percent.

Mobile money companies can leverage the proliferation of smartphone ownership in Pakistan to facilitate ROSCA transactions. Besides providing the much-needed financial accounting trail for ROSCA users, they might also encourage mobile wallet adoption. One such example is a ROSCA app “Akiba”, which has been successfully launched in several countries in Latin America and Africa. The app allows users to form ROSCA groups and to conduct transactions within the group using their mobile money accounts, while also keeping a record of the transactions.

ROSCA users could prove to be a viable market niche for mobile money providers. By facilitating existing financial behavior through mobile wallets, an app such as “Akiba” has the potential to yield a number of benefits, not the least of which is a much needed financial trail of transactions. Such apps also have the potential to encourage mobile wallet adoption and, as a result, extend financial inclusion to the unbanked.



[1] The sample size for all FII surveys in Pakistan is 6000 individuals, the survey is representative at the national as well as provincial levels.

[2] “Smallholder Farms: Peer Pressure,” Knoche, Jamadagni and Rao. Development and Cooperation,

[3] “Visual Conversational Interfaces to Empower Low-literacy Users,” Agarwal et al. IBM India Research.

[4] “Telecom Sector: Pakistan to have 40 million smartphones by end of 2016,” Express Tribune, Sept. 9, 2015.