An Assessment of the Operations of Rotational Savings and Credit Association in the Kumasi Metropolis, Ghana

Abstract

Small and medium scale enterprises (SMEs) play significant roles in socio economic development of every country in the world and serve as an important source of job creation and innovation. Despite their significant contributions to the economy, access to funding is a challenge to traders within the informal sector in Ghana. These challenges negatively affect the businesses within the informal sector of the economy. As a result, Rotational Savings and Credit Associations (ROSCA) becomes the most easiest and available alternative through which most of these traders raise funds to support their business operations. This study aims at examining the operations of ROSCA in the Kumasi Metropolis, Ghana. The study adopted survey strategy using a mix of quantitative and qualitative methods, although the focus was more on quantitative. Primary data was also used for the study. The study revealed that, Capital Expansion appears to be the major reason that influences individuals’ decision to join the Rotational Savings and Credit Association. Information from the study also showed that on the average, ten (10) people constitute the membership of various Rotational Savings and Credit Association within the study setting. Balloting was found to be the major criteria used by Rotational Savings and Credit Associations to determine the turn of each member in terms of disbursing the accumulated funds to their membership.