Every fintech founder in this region has drawn the same slide at some point: the underbanked adult, the missing credit file, the product that will finally reach them. Fewer have noticed that the person on the slide already owns a savings product, and has for centuries. It is called arisan in Indonesia, paluwagan in the Philippines, hui in Vietnam, chit fund in India, tanda in Mexico, gam’eya in Egypt, stokvel in South Africa, susu in West Africa. An estimated two billion people use some version of it, moving on the order of a trillion dollars a year entirely outside formal banking.
The mechanism is almost insultingly simple. Ten people agree to put in US$100 a month. Each month the group hands the full US$1,000 to one member. After ten months everyone has paid in US$1,000 and everyone has taken out US$1,000. No interest, no lender, no credit file.
What the circle produces is not yield. It is timing. It converts a slow trickle of savings into a lump sum large enough to do something with — a deposit, a motorbike, a term of school fees — and it does that on social obligation rather than a balance sheet. That is why it has survived every wave of financial inclusion products aimed at replacing it.
It also has exactly one unsolved problem, and it is the only genuinely interesting thing about the format: who goes first?
The ordering problem
The lump sum in month one and the lump sum in month ten are not the same product. The first recipient has effectively borrowed from the group and repays over the remaining rounds. The last has lent to the group for nine months and gets nothing extra for it. Same nominal amount, very different value.
Informal circles resolve this in one of three ways, and each has a well-known failure mode. The organiser decides, which turns the queue into patronage. A lottery decides, which is fair in expectation and unsatisfying in practice — the member with a hospital bill in March does not care about expectation. Or seniority decides, which quietly taxes newcomers to reward the people who least need the money.
All three share a deeper flaw: the position in the queue has real economic value, and nobody is allowed to say what it is. Value that cannot be priced gets settled socially, and settling it socially is where circles collapse. Ask anyone who has run one.
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The old answer, and why it never scaled
The interesting thing is that this was solved a long time ago, in India. Registered chit funds have run a discount auction for generations, formalised in law since 1982: each round, members bid down the amount they are willing to accept, the lowest bid takes the pool, and the discount is distributed among the rest. A member who needs cash now pays for the privilege. A member who can wait is compensated for waiting.
It works. It also never left its jurisdiction. The auction is administered by a registered foreman, denominated in rupees, tied to Indian regulation, and reachable only by people physically inside that system. The neighbouring arisan in Jakarta, running the same underlying product, still resolves its order by drawing names out of a bowl.
That is the gap worth building into: not the auction — the auction is old and proven — but the fact that it has never been made portable.
What changes when the queue is priced
A disclosure before I go further: I built ROSCASH, so what follows is the perspective of someone with a stake in the answer, not a neutral observer of it.
We run circles where each round is settled by a descending-discount auction. Members bid a discount against their own payout; the lowest bid at the close of a six-hour window wins and receives the pool minus that discount. Seventy per cent of the discount is split across every share in the circle that has not yet been paid out — participation in the bidding is irrelevant to eligibility, and only the single share the winner redeems that round is excluded. The platform keeps the remaining thirty per cent, and nothing else: on auction circles the winner pays no commission on the pool at all, because the discount they bid is already the payment.
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Three things follow from that design, and they are worth separating from any marketing claim.
- First, the queue stops being a favour and becomes a good with a market price, set by the people in that specific circle in that specific week. Nobody arbitrates.
- Second, the platform earns only when a member chooses to pay for speed. A round in which nobody bids generates no revenue for us at all. That is an uncomfortable incentive to design into your own business model, and it is the right one — it means we are not paid for the mere existence of a circle.
- Third, and least convenient to say out loud: a savings circle redistributes, it does not create. Aggregate member profit and loss across a full cycle sums to exactly minus the platform’s revenue. There is no yield being generated anywhere. The member who waits is paid by the member who hurries, and any platform in this category that describes both sides as “earning” is selling you something. What a circle offers is not return. It is a priced, voluntary trade between two people with different urgency.
What it does not solve
Custody and regulation remain the hard part, and we would rather state that than be found out. ROSCASH is in public beta. Funds are held and processed by the platform under each circle’s published rules; on-chain custody, where code rather than a company holds the pool, is on the roadmap and has not shipped, there is no contract address and no audit. We hold no licence. Platforms like MoneyFellows in Egypt and Hakbah in Saudi Arabia do hold local licences and settle in fiat, and for a saver who wants a national regulator standing behind the product, that is the honest recommendation.
What settling in USDC buys instead is the thing the chit fund could never do: three members of one circle can sit in three different countries.
The ordering problem is six centuries old and still open in most of the world. It does not need a new savings product. It needs a price.
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