Rosca Participation in Benin: A Commitment Issue

Abstract

In the light of first-hand data from a Beninese urban household survey in Cotonou, we investigate several motives aiming to explain participation in Rotating Savings and Credit Associations. We provide anecdotal pieces of evidence, descriptive statistics, Full Information Maximum Likelihood (FIML) regressions and matching estimates which tend to indicate that most individuals use their participation in a rosca as a device to commit themselves to save money and to deal with self-control problems. © 2011 Blackwell Publishing Ltd and the Department of Economics, University of Oxford.