Digital ROSCA

 

Saving money with friends

This short case study is for a concept I came up with while my family was going through some tough health and financial times in Guatemala. It is a concept for a chatbot that can help you save money with a ROSCA. You may or may not be familiar with the concept of a ROSCA — a rotating savings and credit association, it’s a way for friends and family to save money by putting in money in a big pot and distributing it on a regular cycle. While they’re not widely known in the US, they’re very popular in developing countries. Hopefully, these illustrations can help to explain:

 
 
 
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My mom is in several ROSCAs that are run through Whatsapp, it’s nothing fancy, there’s a chatroom where people trade pictures and memes, and whenever the time rolls around they upload pictures of their account numbers whenever it’s their turn so others can deposit money into the winner’s account. And just like my mom, there are tons of people in Latinamerica and around the world that rely on ROSCAs as a reliable way of getting some cash in a bind.

Benefits of a ROSCA

  • Gives you access to a large sum of money quickly

  • THEY’RE NOT LOANS

  • Mechanics are simple to understand 

  • Everybody wins!

It’s important to understand the following factors about developing countries when it comes to banking and spending:

  • Banking is not very sophisticated.

  • The population isn’t very technically savvy.

  • Not everyone has a high-end smartphone.

  • eCommerce has not fully taken off.

  • Credit card usage and adoption are low so money isn’t always available.

Running a ROSCA through a Facebook Bot

I was originally thinking about this as a Whatsapp bot, where my mom runs her ROSCAs, but unfortunately, there’s no such thing as WhatsApp bots, but Facebook has a vibrant bot ecosystem. It also enjoys widespread adoption just like WhatsApp.

  • Meets users where they are.

  • Doesn’t require critical mass, unlike a standalone app, you can piggyback off of Facebook’s adoption.

  • Conversation design, AI, NLP, ML can make interactions much much easier!

I was originally thinking about this as a Whatsapp bot, where my mom runs her ROSCAs, but unfortunately, there’s no such thing as WhatsApp bots, but

  • Organizing *anything* with a group of people is very hard.

  • Are people going to pay up?

  • People have less time to get together.

  • Because banking isn’t very sophisticated — no Venmo, no PayPal; money transfers are hard.

The bot will guide whoever needs to create a ROSCA through the following steps:

  • Naming the ROSCA

  • Determine contribution

  • Decide time period

  • Who is going to participate

This is the message a friend receives when they’re being asked to contribute to the ROSCA:

Ready, set, save!

This is the first message that participants receive after all of the logistics are completed, a confirmation of the details of the ROSCA and who is next to receive the pot.

 
Luis Guzman