6 ideas
The central financial need of poor households is to convert many small, irregular sums they can spare into a usable lump sum when they need it, for life-cycle events, emergencies and opportunities. Savings, loans and insurance are all just different routes to that same conversion, so any service should be judged by how reliably it delivers the lump sum.
There are three ways to build a lump sum from small savings. You can save up by accumulating deposits first and withdrawing later. You can save down by taking a loan now and repaying it in installments, or save through by paying a steady stream and drawing the lump sum at some point along the way, as in a rotating club. The timing differs, but each is a stream of small payments turned into one large sum.
Each day they hand over a fixed small amount, and at month's end they get back all but one day's deposit, which works out to a steeply negative interest rate. They accept this because safety, discipline and a guaranteed lump sum are worth more to them than the return on their money.
In a ROSCA, members each pay a fixed amount into a pot at regular intervals. The whole pot goes to one member each round, in turn, until everyone has received it once.
The obstacle for the poor is not an inability to save. Their small surpluses are hard to protect from theft, from relatives' claims, and from their own daily temptation to spend. Informal devices exist mainly to take cash out of reach and lock in a commitment to keep paying, so good services should offer safety and discipline even more than yield.
Informal arrangements such as savings clubs, moneylenders and collectors reveal what the poor actually value, which is convenience, frequent small payments, flexibility, and reliable access to a lump sum. They should be read as evidence of demand rather than as obstacles to replace. Their weaknesses, such as rigidity, fraud risk, and limited scale, show where formal providers can add value.