The GB-ROSCA hybrid microfinance model : a strategy for small-scale development projects in Nigeria

Funds availability has always been a major constraint to micro and small business development projects in many Asian and Latin American countries, and more so for all African countries. An assortment of various credit models has been devised and used over time by policy makers in these countries to bridge the gap between the supply and demand of small business funds. Each of these earlier credit models failed to solve the problem owing to endemic corruption in the system, such as kickbacks, heavy repayment default, over-dependency on subsidies, high transaction costs, etc. In recent times, novel models of credit supply have also evolved to benefit millions of micro and small business operators, and the Bangladeshi Grameen Bank (GB) model is the foremost in this regard. This thesis reviews the existing literature on these new generations of credit supply programs pioneered by Bangladeshi GB strategy and highlights the importance of micro-savings in development. The thesis also examines the Revolving Savings and Credit Association (ROSCA) systems world-wide, modelled on the GB?s credit supply approaches by the non-governmental organisations (NGOs) in both developed and developing countries, and comes to the view that savings first before disbursement begins is the more effective pathway to help the poor.