Trust and development: rotating savings and credit associations in Rwanda

Abstract

Trust is a critical challenge that has faced Rwandans for many years due to the ethnic conflict, which disrupted people’ lives starting in 1959s between Hutu and Tutsi. Especially, after the Genocide of 1994, trust among people cannot be taken for granted. However, where trust is occurred, it changes everything; it promotes social order and stability through social exchanges and interactions. Moreover, trust reduces transactions cost and hence, it leads to development through people’s initiatives. Rotating Savings and Credit Associations (Roscs) are mutual aid associations where trust is viewed as a prerequisite for Roscas’ sustainability. Recently, research considers Roscas as a pro poor community development. This paper discusses the relationship between trust and development, and generates knowledge about Roscas, as well as its presence and involvement in the development of Rwanda aftermath of Genocide in 1994. Participation and persistence of Roscas in development, is examined on the basis of the qualitative interviews. In addition, the connection between trust and development is framed according to the social and economic theories. In Roscas, trust is based on individual reputation, past experience (knowledge) and calculus. This research found that Roscas have facilitated in building trust among their members as well as their development