The basics of ROSCA

The ROSCA is a unique opportunity to save and finance projects in a responsible and supportive manner. This small guide offers a clear and detailed explanation of this concept and how it works.

🤔​ So, what is a ROSCA?

It is estimated that two billion people worldwide use what is known as a “ROSCA” (also known as "tontine", “solidarity savings circle”, “collective savings circle”, “savings association”...). This very old practice, originating from Africa and Asia, allows a circle of individuals (relatives, friends, families, etc.) to save together for a given period.

In practical terms, you gather your loved ones and collectively decide to contribute the same amount of money each month. And each month, in turn, one participant receives the entire pot. Generally, a ROSCA lasts as many months as it has members. In short, one member = one month.

⇒ Example: if you are 10 and each of you contributes 200 euros every month ⇒ the tontine lasts 10 months and each member collects 2,000 euros in turn (in reality, the beneficiary of the month will cash in 2,000€ - 200 € since they will not contribute this month, which is 1,800€). You can choose the order of beneficiaries by mutual agreement or by drawing lots, according to your preferences and funding needs.

💡​ And why be a part of it?

The benefits of this system are numerous. By saving together, you strengthen your social bond and give meaning to your savings. Unlike money deposited in your traditional savings products (like a French "Livret A"), the money from your ROSCA helps support your loved ones in financing their projects. The only people who collect your money are the members of your tontine, and you can follow in real time what they are financing. It is a worthwhile and virtuous practice that promotes trust and cooperation within communities.

Another advantage of the ROSCA: it plays a significant educational role. If you have trouble saving alone, this collective practice is made for you. By taking responsibility, it fosters discipline. The trust and interdependence that develop among the members of a tontine make it a unique financial management experience.

You will have understood, the ROSCA is a unique financial alternative. At Cirkkle, we are committed to helping all those who wish to engage in this form of savings that is both traditional and innovative, by offering them a secure and turnkey application to (re)give life to their tontines.

See you soon on Cirkkle 💚