Blockchain startup’s combines the ancient wisdom with Blockchain Technology

ROSCA (Rotating Savings and Credit Association) has existed since centuries ago and it is still a widely known association in some countries. It’s called the ‘poor man’s bank in third world country which adopts the crowdfunding and community methodology to raise fund and helping each other within a community. The core foundation of ROSCA is based upon trust which is why most of the ROSCA group is held together by family and friends. The reason being if there’s a dishonest member from within the group who does not abide to the rules and policies setup for the lending cycle (i.e. sabotage of money from the group, dishonor instalment payback), the chain of funding and reserve will be broken, thus causes loss to the rest of members in the cycle. In order to reduce these risks, the leader who forms the ROSCA group has to be the most trustable person as he will not only be responsible to take care of the funding cycle, he is also liable to hold and keep track of every transaction records. In other words, the leader of a ROSCA group is the caretaker of funds and records for his community members. However, human is corruptible when it comes to money handling. The leader might be the culprit that lead to falsified transaction records, missing fund records, money uncollectable and reserve amount that does not reconcile to bookkeeping. It is these inevitable scenarios that actually happened countless times over the years that government in countries like India and Singapore intervene to legalized ROSCA with governing rules and regulations to safeguard the wealth of the community members.

Blockchain is the fundamental technology for Bitcoin and it is the technological advancement that will change the world. Blockchain was being created to solve the financial issue like decentralized the regulations and power which controlled by one party, public sharing of distributed ledger which can be viewed by interested parties, transparent and etc. As per above explanation, Blockchain technology fits well to the fundamentals of ROSCA. With its decentralized methodology and the distributed ledger’s nature, it is sort of digital trust in the digital world. The record generated cannot be altered and as public ledgers, they are viewable by everyone. Every transaction among different individuals or stakeholders are bonded by agreement generated by smart contract. Blockchain and ROSCA is the perfect match as it is able to solve the conventional ROSCA problems. The risk will be effectively mitigated with this new technology, thus we believe the ROSCA methodology will be revived again to the benefits of many people across the world.

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