The same idea, in almost every culture on earth.
A group of people each pay in a fixed amount on a fixed schedule. One member takes the whole pot. Next round, somebody else does, until everyone has had a turn. Economists call it a rotating savings and credit association; almost nobody else does. It has been independently invented, or carried by migration, into practically every part of the world — and hundreds of millions of people still use one.
Work out your circle's payout schedule →Kameti
Full guideAlso called a committee, beesi or bachat committee. Turns are often drawn by ballot.
Tanda
Full guideTimed to paydays rather than months. Widespread in Latino workplaces.
Stokvel
Full guideUnusually formal — written constitutions, elected officers and club bank accounts.
Susu
Full guideCovers both a rotating group and a daily-deposit collector service.
Chit fund
Full guideRegulated, and allocates the pot by auction rather than by turn.
Esusu
The Yoruba term for the rotating form; ajo is closely related.
Arisan
As much a social gathering as a savings scheme — turns drawn at the meeting.
Paluwagan
Common in workplaces and among overseas Filipino workers.
Equb
Long-established and often large, with formal rules and elected leaders.
Tontine
The francophone term, used widely in Senegal, Cameroon and Côte d'Ivoire.
Gam'eya
Widespread among colleagues and extended families.
Hui
One of the oldest documented forms, with bidding variants.
Kye
Carried into Korean-American communities, historically funding small businesses.
Merry-go-round
The common English name; frequently run by women's groups.
What they all have in common
Every version shares the same three properties. Contributions are fixed, so nobody has to negotiate each round. The membership is closed and finite, so the cycle ends rather than needing new recruits. And the total paid out equals the total paid in — there is no interest and no profit, with the single significant exception of the Indian chit fund, where an auction mechanism means patient members genuinely earn a return.
What a savings circle really changes is timing. It converts a slow trickle of small amounts into a usable lump sum, and it lets that lump sum arrive early for some members and late for others. The person who takes the first turn has effectively borrowed from the group at zero interest. The person who takes the last has been made to save by people who would notice if they stopped. Both got something a bank would have charged them for, or refused them outright.
Where they differ
The interesting differences are in the details, and they map onto how much a society formalises trust. A Pakistani kameti or a Mexican tanda usually runs on nothing but reputation and a shared understanding of who everybody is. A South African stokvel is often formally constituted, with a written constitution, elected officers and a club bank account requiring several signatures. An Indian chit fund goes furthest of all: it is a regulated financial product under the Chit Funds Act, 1982, run by a licensed foreman who must register with the state and deposit security.
Turn order is the other real variable. Some groups draw lots, which is why so many are named after the ballot or the lucky draw. Some fix the order in advance. Some allocate by need, quietly functioning as a mutual-aid system for weddings, medical bills and school fees. And chit funds auction it, letting members bid for early access with the discount shared among everyone who waited.
The risk nobody advertises
Every savings circle has the same structural weakness, and it is worth understanding before you join one. Whoever receives the pot first has been paid by everyone else while contributing only once. Nothing except their own standing in the group obliges them to keep paying for the remaining rounds, and if they walk away, the loss falls on the members who have not yet been paid.
This is why these groups form among people with a relationship to protect — families, congregations, colleagues, neighbours — and why they tend to stay small. The practical safeguards are unglamorous but effective: agree the order before the first payment, write the rules down, and keep a record every member can see. None of that prevents a default. What it prevents is the second argument, the one about who actually paid in month four, and that is the one that usually ends the friendship.
Savings circles, committees and rotating funds explained
A savings circle goes by a different name almost everywhere it is practised. It is a kameti or a beesi in Pakistan, a tanda or cundina in Mexico, a stokvel in South Africa, a susu in Ghana and the Caribbean, an esusu or ajo in Nigeria, an arisan in Indonesia, a paluwagan in the Philippines, an equb in Ethiopia, a tontine in francophone Africa, a hui in China, a kye in Korea and a chit fund in India. The mechanics barely change: everyone contributes the same amount on the same schedule, and each round one member receives the entire pot until the cycle completes.
These guides explain each one on its own terms — how the turn order is decided, what protections exist, what happens when a member stops paying, and how the practice compares to simply using a savings account. If you run one yourself, EconoGlance can keep the contributions, the turn order and the payouts in a single shared record that every member can check, which removes the bookkeeping argument even though it cannot remove the trust. It is free to start on iPhone and Android.
Frequently asked questions
There is no common English name, which is why the local word is normally used. The technical term is a rotating savings and credit association, usually shortened to ROSCA. In East Africa the English name 'merry-go-round' is widely used, and 'savings club' or 'savings committee' are the nearest everyday equivalents.
No, and the difference is structural rather than a matter of degree. A savings circle has a fixed membership and a fixed number of rounds, and pays out exactly what it takes in. A pyramid scheme must keep recruiting new members to pay earlier ones and promises a return. If a scheme needs growth to function, it is not a savings circle whatever it is called.
In almost every version, no — you receive back precisely what you put in, and the benefit is timing rather than return. The exception is the Indian chit fund, where members bid for the pot and the discount accepted by the winner is shared among the others, so patient members do earn a genuine return.
The shortfall falls on the members who have not yet received the pot, since the person who leaves has typically already been paid. There is usually no legal recourse in an informal group, which is why membership is normally limited to people with a real relationship at stake, and why agreeing the rules and the order in writing beforehand matters.
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