Rotating Saving and Credit Associations (ROSCA) is an important informal financial institution in developing economies. This article investigates the practice of ROSCA in Wenzhou as a case to explore how the interest rate is determined in a local credit market. We find that interest rates may vary across different purposes of credit demand (e.g., investment, insurance, or durable good consumption). The difference in credit demand may also drive participants to create alternative ROSCA and its implied interest rates are different accordingly. The case of ROSCA and its relationship with the local credit market may shed light on the financial market development and liberalization of interest rates during economic transition.

中文翻译：

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轮换储蓄信贷协会与利率自由化的实践-以温州为例

循环储蓄和信贷协会（ROSCA）是发展中经济体中重要的非正式金融机构。本文研究了温州ROSCA的做法，以探讨如何在本地信贷市场中确定利率。我们发现，利率可能因信贷需求的不同目的而异（例如，投资，保险或持久性良好消费）。信贷需求的差异也可能驱使参与者创建替代的ROSCA，其隐含利率也相应有所不同。ROSCA的情况及其与本地信贷市场的关系可能会为金融市场发展和经济转型期间的利率自由化提供启示。