Rotating Savings and Credit Association (Rscas)

Abstract

A lot has been written about tharambee' and Co-operatives in Kenya, but not about Rotating Savings and Credit Associations which like harambee and co-operatives are self help of a kind and which have become a household name not only in Kilungu but in many parts of Kenya and the world. This study was carried out between January and June, 1989 in all sub-locations of Kilungu location, Kilome Division in Machakos District. A sample of 21 Rotating Savings and Credit Associations was drawn from over 100 unregistered and registered associations in Kilungu and a sample of 60 individual members of the associations from allover the location. The study investigated the social and economic basis and functions of Rotating Savings and Credit Associations, the sources of Development and commercial credit in Kilungu Location and the .contribution of RSCAs to the development of Kilungu Location. It has been observed that the motivation to joining RSCAs is more than making monetary profits because there are RSCAs are mostly the low income groups who have limited education and wealth to enable them deal with commercial financial institutions. Development credit is only available to coffee farmers to improve coffee cultivation and to the more affluent. ( v ) However, RCAs, the alternative, play a significant role in the development of Kilungu Location because the money contributed is used properly for the planned objectives. Other related and intergrated activities like rotating labour has helped improve food production in the area. The insurance aspect involved helps the sick and diseased members and the togetherness and social solidarity created among members in the groups give them encouragement and guidance to continue working hard to cater for their basic and other economic needs even during hard times. This study further observes that the Rotating Savings and ,Credit Associations, are a success story in Kilungu Location despite the problem of raising money te contribute, members.