Market at Jalal-Abad, Kyrgyzstan. Photo BY-NC-ND 2.0: Marco Fieber / Flickr. Some rights reserved.As the taxi driver prepares to embark on his daily route connecting Bishkek, the capital of Kyrgyzstan, to Talas, a city located in the country’s north east, a passer-by hands him stacks of money. The man explains that the money (which is the national currency, the som) is for his village. The driver appears accustomed to this sort of request: he charges his fee and takes the stacks. Once we depart, I ask the driver about this financial transfer, and he explains that the funds are meant to cover the person’s sherine obligations. “You know, his sherine is quite a costly one, I wonder why do people go on with this system?”
Sherine is the Kyrgyz term that designates an informal financial institution widespread across Kyrgyzstan, a country in the heart of Central Asia that achieved independence following the dissolution of the Soviet Union in 1991. This system corresponds to what economists term Rotating Savings and Credit Associations (ROSCAs). The concept describes a group of individuals who agree to make a number of financial contributions to a common pot over a predefined period of time. At the group’s regular meetings, the pot’s lump sum is given in turn to each contributor for their personal use, until eventually every group member has had their turn in using the funds, which ends a sherine life cycle.
ROSCAs have been around for centuries all over the world, albeit under different denominations. As prominent US political scientist Robert Putnam puts it in his seminal book Making Democracy Work: Civic Traditions in Modern Italy, ROSCAs have been found from “Nigeria to Scotland, from Peru to Vietnam, from Japan to Egypt, from West Indian immigrants in the eastern United States to Chicanos in the West, from illiterate Chinese villagers to bank managers and economic forecasters in Mexico City.” Putnam goes as far as to claim that many US savings and loan associations owe their beginnings to ROSCAs.
