Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/65430 
Year of Publication: 
2011
Series/Report no.: 
CREDIT Research Paper No. 11/05
Publisher: 
The University of Nottingham, Centre for Research in Economic Development and International Trade (CREDIT), Nottingham
Abstract: 
Much of the existing literature on the use of informal credit arrangements such as ROSCAs (Rotating and Credit Saving Associations) theorises the use of such institutions as arising from market failures in the development of formal saving and credit mechanisms. As economic development proceeds, formal institutions might therefore be expected to displace ROSCAs. We show, using household data for Ethiopia, that in fact use of formal institutions and ROSCAs can co-exist, even in the same household. We examine usage of both formal and informal institutions across the household income gradient, and provide a theoretical model consistent with these empirical facts.
Subjects: 
Household saving
Credit institutions
ROSCAs
Ethiopia
JEL: 
O16
O17
Document Type: 
Working Paper

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