Across Southeast Asia, fintech founders frequently illustrate the underbanked adult lacking a credit history, envisioning a solution that will finally include them. Yet fewer notice that many of these individuals already possess a centuries‑old savings mechanism. Known as arisan in Indonesia, paluwagan in the Philippines, hui in Vietnam, chit fund in India, tanda in Mexico, gam’eya in Egypt, stokvel in South Africa, and susu in West Africa, these informal circles engage an estimated two billion people, moving roughly a trillion dollars annually outside the formal banking system.

The operation is deceptively straightforward. Ten participants each contribute US$100 per month; the pooled US$1,000 is then given to one member each month. After ten months every participant has both contributed and received US$1,000, with no interest, lenders, or credit assessments involved.

What such circles generate is not return but timing. They transform a steady stream of small savings into a sizable lump sum — sufficient for a down‑payment, a motorbike, or school fees — by relying on social obligation rather than balance‑sheet metrics. This effectiveness explains why the model has persisted despite numerous fintech attempts to displace it.

The sole unresolved issue — interesting precisely because it is unique — is determining who receives the first payout.

The ordering problem

The lump received in the first month differs in real value from that received in the tenth month. The inaugural recipient essentially borrows from the group and must repay over subsequent cycles, whereas the final participant has effectively lent to the group for nine months without any additional compensation. Although the nominal amounts are identical, their economic value varies considerably.

Informal circles attempt to address this by three common methods, each with distinct drawbacks. An organizer may designate the order, turning the queue into patronage. A lottery allocates positions based on chance; while statistically fair, it offers little comfort to someone facing an urgent expense such as a March medical bill. Alternatively, seniority grants precedence to long‑standing members, effectively taxing newcomers to reward those who least need the funds.

All three approaches share a fundamental shortcoming: the queue position possesses tangible economic value, yet it remains unpriced. When value cannot be quantified, it is negotiated socially, which often precipitates the collapse of the circle. Anyone who has managed such a group can attest to this dynamic.

The old answer, and why it never scaled

The gap, therefore, is not the auction itself — an established and proven mechanism — but the lack of a portable implementation that can operate across borders.

In fact, a solution existed long ago, in India. Registered chit funds have employed discount‑auction mechanisms for generations, codified into law in 1982. In each round, members bid downward on the amount they are willing to accept; the lowest bid wins the pool, and the discount is distributed among the remaining participants. A member who requires immediate cash pays a premium for that privilege, while a member who can defer receipt is compensated for the delay.

These approaches function effectively, yet they remain confined within the Indian regulatory framework. The auction is overseen by a registered foreman, measured in rupees, and bound by Indian law, limiting participation to those physically within that jurisdiction. Conversely, a similar arisan in Jakarta continues to resolve ordering by drawing names from a bowl, illustrating that the methodology has not been exported.

What changes when the queue is priced

Before proceeding, a disclosure: I am the creator of ROSCASH, so the following analysis reflects my vested interest rather than an impartial observation.

Our platform operates circles settled through a descending‑discount auction. Participants submit a discount against their prospective payout; the lowest bid at the end of a six‑hour window wins the pooled amount minus that discount. Seventy percent of the discount is distributed among all outstanding shares that have not yet been paid, regardless of whether they bid. The winning share receives only its portion, while the platform retains the remaining thirty percent, without any additional commission. In this model the winner’s discount serves as the sole payment, eliminating extra fees.

• First, the queue transforms from an informal favour into a commodity with a market‑determined price set by participants within that specific circle and week; no external arbitrator intervenes.
• Second, the platform generates revenue only when a member elects to pay for faster payout; if no bids are placed, the platform earns nothing, creating a genuine incentive to design a sustainable business model — revenue is earned solely from voluntary speed‑related payments, not from merely operating a circle.
• Third, and the most uncomfortable truth: a savings circle merely redistributes wealth; it does not create new value. When aggregated over a full cycle, member profits and losses exactly offset the platform’s revenue, meaning no genuine yield is generated. The waiting member is compensated by the accelerating member, and any platform that frames both as “earning” is misleading. In essence, a circle facilitates a priced, voluntary exchange between parties with differing urgency.

What it does not solve

Custody and regulatory compliance remain the principal challenges, and it is preferable to acknowledge them rather than conceal them. ROSCASH is currently in public beta; funds are managed by the platform according to each circle’s published rules. On‑chain custody — where smart contracts hold the pool — is planned but not yet implemented, and no contract address or audit exists. The platform holds no licence. Comparable services such as MoneyFellows in Egypt and Hakbah in Saudi Arabia possess local licences and settle in fiat, which may be the preferable option for savers seeking official regulatory backing.

Settlement via USDC enables a capability traditional chit funds lack: participants from three distinct countries can belong to the same circle.

The challenge of sequencing payouts is centuries old and persists across most of the world. It does not necessitate a novel savings instrument; rather, it calls for an appropriate pricing mechanism.

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