The Research On Operation Mechanism And Risk Of Rosca:

For a long time,our country's financial market shows obviously dualistic characteristics:the formal finance coexist with informal finance(or folk finance).The former refers to the financial institutions and their activities approved to establishment;The latter refers to those who were not controlled by the central bank regulators embodied in various forms of informal lending activities and its scope is quite widespread,ROSCA is one of them.ROSCA as an important informal financial organization,which is popular especially in our country southeastern coastal areas such as Guangdong,Fujian and Zhejiang.It is also widely distributed in five continents stretch over more than eighty countries and regions totally,active in the crowd who are from different races,different beliefs and different classes.In recent years,ROSCA has gradually become a hot topic of informal finance in Chinese academic circle,mainly because which as a unique folk financial organizations being controversial for a long time.On the one hand,the government has to resist it because of its potential financial risks;On the other hand,ROSCA also play an important role in the development of rural economy which would not be replaced by formal financial.Thus,to make more clearly understanding about the specific operational mechanism and the potential risks about ROSCA,which would not only can help the residents and enterprise to meet their own funds demand in a more reasonable way,but also can make the regulation more effectively by regulators and thus exert its advantage to the largest extent to avoid disturbing the order of financial market or damaging the interests of the public.ROSCA has different forms according to the different classification ways.It can be divided into three different forms of "Bid ROSCA","Deterministic ROSCA" and"Random ROSCA"according to the order of capital allocation which is the most commonly used way.this paper select "Bid ROSCA"and "Deterministic ROSCA"as the main research object according to the actual situation of Dongtou,Wenzhou,and choose typical practical cases respectively to make a deeper analysis and contrast in the content of operational mechanism and risk avoidance mechanism,thus which can provide a new perspective to explain the questions such as "why ROSCA is so popular?","what cause the invalid ROSCA disturbance?"and put forward some feasible advices to help governmen to make a objectively correct view towards ROSCA and manage it in a more reasonable and effective way.