Jamaica's ROSCA: The Partner System

A popular form of savings system in Jamaica is the "Partner", which is called by many different names elsewhere in the Caribbean and is also found in many other parts of the world. It is often described as a form of capital accmulation. A Partner is basically a partnership among people to save collectively. Usually an established member of a community manages the partnership and is referred to as "the banker". Often a banker is a woman. The partners contribute a regular sum daily, weekly, fortnightly or monthly basis. Every day, week, fortnight or month, one member of the partner receives the total amount contributed by the partners over that period., less the equivalent of one contribution, which is given to the banker as payment for the banker's services. The banker determines the order in which members can make their draw and will normally give the priority to the more established and trusted members, leaving those who are least reliable till the last. An early withdrawal is effectively equivalant to a loan and there is often a confusion as to whether the "partner" is a savings or loan system for this reason. The longest "partners" rarely exceed 6 months. "Partners" are recognised in the Jamaican Courts and there are accounts of members who have failed to pay their contribution being taken successfully to court. Attitudes towards the system are, however, mixed.

Many people like the system because it gives them quick access to ready cash and in emergency situations they can make an early withdrawal, providing of course, that they are trusted by the "banker". It is also the only system available to a large number of the poor.

During a survey, one squatter said that he did not trust the "partner" system as a girlfriend had lost a lot of money when the banker disappeared. Another claimed that many "bankers" give all kinds of excuses not to pay.

The savings pattern of households vary considerably, but there is a marked absence of use of building societies, and credit unions are only used rarely. In a survey conducted to get a better insight into people's savings patterns, one saved in a tin under his bed until he had enough to deposit, one saved very irregularly, and three saved in "partners" and then deposited their hands in banks. One respondent, who uses both banks and "partner" used the bank for "emergencies" and the partner for predictable major expenses such as school fees. Another bank saver said that she wasn't saving anything - "it's pure withdrawls." Of the respondents who saved with partners, four contributed more than one a week. Most contributions are for between twenty and forty dollars. One respondent liked her work-based saving scheme (treated as a credit union) because she made her contribution immediately out of her pay check at work. This is very convenient because "if I don't have any money, I can just go ahead and get a hundred dollars. Apart from this, I don't save anything. I don't like partners because the bankers charge too much." A squatter who belongs to a credit union pays in 100 dollars a month "so I can buy a house someday." One owner was against banks "because they don't force you to save."

The last comment revealed a pattern that emerged consistently in discussions with respondents about saving. Most respondents were far more interested in joing a saving scheme that would 'force' them to save such as a partner or a work-based credit union than an institution that relies on voluntary deposits. Banks fail to provide this form of discipline which appears to be prioritised above any interest earnings that the formal financial institutions might have to offer.

Comments (John Owens, Project Manager, Microenterprise Development Project, USAID/Jamaica):

  1. Although in many groups the banker collects a "fee" or "hand" this is not always the case. In family partners or in office partners, the banker of the group usually does not collect a fee.
  2. Many partners especially among vendors and taxi operators do regularly exceed 6 months although few exceed 12 months.
  3. We have also discovered that the partner system is widely used by vendors and those in the transportation sector for gaining access to working capital. In fact in one study of more than 200 vendors, we found that more than 92% raised working capital through the partner system on a regular basis.

UNCHS [HABITAT], "The Partner System" Bulletin of the International Year of Shelter for the Homeless. Tenth Issue, July 1987.

United Nations Centre for Human Settlements [HABITAT]
P.O. Box 30030, Nairobi, Kenya.

Return to Case Studies and Illustrations

Hari Srinivas - hsrinivas@gdrc.org
Return to the Virtual Library on Microcredit