Five things to do before starting a rotating savings group

Rotating savings groups (also known as ROSCAs) have long served as a vital tool for communities to save money together and borrow from trusted colleauges at no interest. They also offer mutual support, and social connections in addition to the financial benefits.

Creating or joining a group can be tricky. This article will explore five key things to consider to ensure the smooth functioning and success of your savings group. Before we get into our list, let’s define what rotating savings groups are first.

What are rotating savings groups?
Rotating savings groups are formed when a group of trusted friends or family members periodically contribute money into a common pool and take turns to borrow from the pool until every member in the group has had a chance to borrow from the pool, usually at no interest. For example, a group of 5 individuals come together to contribute $100 per week and every week one member collects the $500 contributed. The following week, the same process is repeated and another member is selected to borrow the $500. This is repeated until all 5 members have had a chance to borrow from the pool.

Now that we know what rotating savings groups are, let’s get into our list of FIVE things you should consider before joining or starting your own group.

1. Identify members you know and trust.

Trust is a key and central pillar that holds rotating saving groups together. Without it, all the other pillars fall. When choosing members that will become part of your group, make sure you choose members you know, trust and share similar financial goals with. It is important that you do thorough research on any potential members before allowing them to be part of the group. ROSCAs or rotating groups rely heavily on mutual cooperation and reliable contributors. If you are joining a group that consists of members that you might not have personal social connections with, it is important to have a basic understanding of who they are, their employment status, lifestyle and any other publicly available information that will assist you to make an informed decision.

2. Choose a comfortable contribution amount.

Groups have a higher chance of failing if members choose an amount that is too high which leaves them with no back-up savings to fall back on. As a rule of thumb, you should only contribute not more than 60% of your remaining disposable income, after paying all your bills. As an example, if you remain with $1000 after paying all the bills, you should only contribute into saving groups not more than $600. This method ensures that if your turn to borrow has not arrived and you require some cash to solve any personal difficulties, you have savings to fall back on while you wait for your turn to borrow. This is important.

3. Establish rules and guidelines
Define rules that will govern how the group will operate to avoid any confusion. Decide from the beginning what the members should do if the following things occur:

a. What happens when a member is unable to contribute?

b. How is the borrowing or receiving order determined?

c. How members can swap receiving or borrowing positions?

d. How users exit the group if they no longer wish to be part of the group.

e. How users temporarily help each other to make contributions.

By discussing these things early, all users are aware of the rules and there will not be any confusion when these issues arise.

4. Keep lines of communication open
Continuously communicate with members and check on each other. This ensures you tackle any issues before they escalate. Send each other frequent reminders about payments and encourage each other to stay on the course. RaundTable app will send reminders and notifications to all group members regarding upcoming group activitity such as contributions and payouts. Groups that have supportive and communicative members tend to succeed and reach their goals more than groups that do not.

5. Use technology and platforms to manage groups

Leverage technology to simplify the management of groups. Mobile platforms such as RaundTable can assist with adding members, creating groups, receiving orders, recording transactions, sending reminders and moving funds between members with relative ease.

Example: To see how individuals can effectively manage their rotating saving groups, check out, which provides a seamless platform for managing rotating savings and credit associations.

Now that you know the things to consider before creating or joining a savings group, are there any advantages or disadvantages of participating in ROSCAs?

Advantages of ROSCAs:

  • Equal Access to Funds Without Interest: ROSCAs provide members with an interest-free lump sum payout, ensuring fair access to financial resources for various needs.
  • Fostering a Sense of Community and Mutual Support: Participants benefit from a strong support network, as ROSCAs encourage cooperation and accountability within the group.
  • Encouraging Disciplined Savings Habits: Being part of a ROSCA cultivates a culture of saving regularly, promoting financial discipline among members

Disadvantages of ROSCAs:

  • Untrustworthy members: ROSCAs rely on trust and a member’s failure to contribute as agreed can disrupt the cycle. This is why it is very important to carefully choose your group members.
  • Lack of formal documentation: ROSCAs are informal arrangements between members and may lack the legal protection that comes with traditional financial institutions. However, groups that are comprised of members who know and trust each tend to succeed. It is important to always add members you know, trust and have a social connection with.


Establishing a successful rotating savings and credit association requires thoughtful planning, trust, and clear communication among members. By understanding the advantages and risks, participants can make informed decisions and reap the benefits of financial support and community engagement. As you embark on your ROSCA journey, remember the essence of cooperation and responsible financial management to achieve group success and personal prosperity.

Disclaimer: Nothing in this article, our website or our mobile app should be construed as being personal financial advice. It is general nature only and has not considered your particular circumstances, financial situation or needs. You should consider whether the information is suitable for you or seek personal advice from a licensed financial advisor before making any decision.