The Rotating Credit Association: An Adaptation to Poverty

Rotating credit associations are curious economic institutions which have been reported in many areas of the world. Most frequently they have been analyzed with reference to peasant and urbanizing populations. It has been argued that they serve as "middle rung" economic institutions which promote modernization and train individuals to participate in the economic institutions of modernizing nations. The purpose of this paper is to introduce a hitherto unreported association, the cundina, and to analyze it in terms of a different conceptual framework. It has been argued that if poverty is to be fully understood, the life ways of poor people must be viewed and analyzed as adaptations to the conditions which create poverty. In this paper poverty is explained in terms of the concept of relative deprivation and the concept of adaptation is defined with relevance to this phenomenon. Based upon the cundina as well as a reassessment of the ethnographic literature, this paper suggests that rotating credit associations represent an adaptive response to a condition of poverty or relative deprivation among both peasant and urban populations.