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Archive for the ‘Informal finance’ Category

A cluster of VSLAs in rural Rwanda. Clustering expands the market for governance, and enhances opportunities to ‘rewire’ networks.

The heart of VSLA is ‘time-limitation.’ The time-limitation feature is typically understood as an ‘action audit’ – a way for members to manage risk by giving them an opportunity to say “show me my money.”

A recent study of human cooperation[1] gives us a fresh look at time-limitation. There have been many doubts raised about cooperation: in particular due to the effect of so-called ‘free-riders,’ who exploit its benefits without contributing to its successes. However, (more…)

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Layaway plan from Chuka, Kenya, Feb 17, 2012

A shopkeeper shows us his informal yet careful bookkeeping for his customers.  After selecting the product or device they wish to purchase, they come to an agreement with the shop’s owner for a layaway plan that suits their need for flexibility and control over the amount paid each time and frequency of said payments.  Once the total amount is cleared they are free to collect the device and take it home, sometimes taking as long as 2 or 3 years to reach their goal. Since they have selected the product already and the shop has put their name on it, there is an intangible sense of ownership that incentivizes their efforts to complete the transaction as rapidly as they are able.

The sticker seen is used to mark the specific product as an indicator of having been “Sold”, while (more…)

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