Savings Mobilization: Formalizing ROSCAS in Jamaica
This paper discusses an approach that was utilized by the Workers Bank of Jamaica to provide savings services for lower-income individuals on a large-scale basis. The paper examines:
- How Workers Bank designed a product by imitating informal savings schemes;
- How this instrument operated;
- The costs of managing this type of small scale savings product.
The paper discusses the Partner Savings Plan and analyzes the reasons behind its attractiveness as a savings mechanism for low-income Jamaicans. This product demonstrated that savings products can be designed using informal methods of savings mobilization.
The lesson learnt from analyzing the Partner Savings Plan was that the key to successful savings mobilization are:
- Formal financial institutions operating in rural areas should utilize existing infrastructure to minimize costs;
- Proper market studies and a well-designed market campaign are essential in designing market-driven savings services for rural areas;
- Low opening balances, treasury management, screening of potential customers are essential;
- Procedures should be transparent and easy to understand;
- The product should allow easy tracking and analysis of costs.
Finally, the paper recommends that other service providers in Latin America and the Caribbean utilize the experiences of Workers Bank to offer cost-effective savings services for small savers in their countries.
