So how does the money move?
Rosca Finance is a crowd-savings platform, based on a centuries old system of building savings communities. Thus in a ROSCA, a group of individuals (or friends in our platform), agree to meet for a defined period in order to save and borrow together, a form of combined peer-to-peer banking and peer-to-peer lending. ROSCAs meet at regular intervals and at each meeting all members contribute funds into a pool that is given in turn to one member. This happens at each interval until every participant has received funds. When everyone has received the pool of funds once, the ROSCA is completed.
They are also known as tandas (Latin America), partnerhand (West Indies/UK), cundinas (Mexico), susu (West Africa and the Caribbean), hui (Asia), Game'ya (Middle East), kye (계) (South Korea), tanomosiko (頼母子講) (Japan), pandeiros (Brazil), juntas (Peru), or quiniela.
A rotating savings and credit association, or ROSCA, is a group of individuals who agree to meet for a defined period in order to save and borrow together, a form of combined peer-to-peer banking and peer-to-peer lending. ROSCAs meet at regular intervals and at each meeting all members contribute funds into a pool that is given in turn to one member. This happens at each interval until every participant has received funds. When everyone has received the pool of funds once, the ROSCA is completed. They are also known as tandas (Latin America), partnerhand (West Indies/UK), cundinas (Mexico), susu (West Africa and the Caribbean), hui (Asia), Game'ya (Middle East), kye (계) (South Korea), tanomosiko (頼母子講) (Japan), pandeiros (Brazil), juntas (Peru), or quiniela.
Why must we contribute money (Give) before we receive any money (GET)?
The reason is that we must pool money (GIVE) from all the members before someone can receive their pool (GET). This also shows commitment to the other members on the platform that you are willing to stick to your obligations. Since we are a collaborative platform and we must ensure the security of the members, which is why we don't allow someone to just come in and take money.
Rosca Finance makes it all automatic and easy for our users. All amounts are automatically debited and credited to our users bank account, so you don't have to deal with it. We will provide notification before your gives and also when you receive your get. In order to accomplish this, we use a payment processor to establish a connection with your checking account at your bank. Our payment processor works with an FDIC insured bank and all amounts for individual users are insured up to the FDIC maximum of $250,000. You can do this 2 ways. You can either provide us with your bank routing number and account information (found easily on your check) and we will make two small deposits in your account. Once you confirm those deposit amounts, your account will be linked to our system. Another way to link your bank account (currently limited to a few banks whose logos you can see in the bank link page) is to give your username and password. We use that to establish a relationship with your bank account and our system. Once that is complete, your account credentials are discarded from our systems. We do not hold your account credentials in any form on our systems. It is only used to establish the link between your account and our processors. In fact, if you need to change your bank account information in the future, you will have to provide your bank account credentials again since we do not store that information.
Anytime you miss a Give, your account will be locked. This will also cause your Gets to be frozen until all of your Gives are made up. Each successful Give takes 3 to 4 business days to settle so even if your account has been debited, the settlement time may still leave your account locked until this time period passes.
There are three reasons we require user's SSN. First, we use it to validate the identity of our users to protect everyone on the platform. Second, our payment processor, as part of linking your bank account to our system, performs another identity check (called Know Your Customer) for which an SSN is required. Finally, we report our user's payment history to credit bureaus to help them build their credit and an SSN is required for that purpose. We understand the value of your SSN, and we use industry standard encryption to store the SSN securely.
How Does ROSCA Finance Help Build My Credit?
Rosca Finance works directly with the credit bureaus. We report your "give" transactions as payments because you are demonstrating your ability to pay your commitments. This works in the same way as committing to pay a power bill or rent. By making your committed "gives" on time, it will impact your credit score positively. Conversely, if you are delinquent in making your "gives", this will impact your credit score negatively, so be sure to cover your contribution at the scheduled times and start building your credit!
What Happens When Someone Does Not Make Their Contribution?
If a person doesn't make their contributions, we will report their default to the credit agencies just like any other unpaid bill. In the same way that we're reporting good activity, we are also reporting bad.
Yes. Our payment processor works with an FDIC insured bank, Triumph Bank, so all amounts for individual users are insured up to the FDIC maximum of $250,000.
Does ROSCA charge any fees?
We charge a nominal fee when you first apply for the platform (currently waived for the beta) and we charge a small service fee for each ROSCA, based on its level. This small fee can range from 0.5% - 4.0% of the Get.
Rosca Finance uses the highest industry standards to encrypt and safeguard your information. Furthermore, we do not store information about your bank account after it is linked.
Why can't I use a credit card to pay for my ROSCA?
Our goal is to help our users save money and keep costs low. Credit cards charge a lot of fees, and that is why we don't use them. We only work directly with our user's bank account. Furthermore, we also report all payments made by our users to credit bureaus to help them build their credit. Using a credit card to make those payments will not help them with that effort.
Why Should I Do A Credit Check?
A credit check is not required to join our system. Anybody can join and we allow them to transact and save money. However, if our users want a higher limit then they need to go through a credit check and if approved, will receive higher limits that will allow them to use Rosca Finance more actively.
When you join Rosca Finance, you are given a level based on your current credit score. Your existing credit score gives us an indicator of how likely you will be able to make your contribution. If you are more likely to run out on a circle, you will have to pay a higher fee and interest to participate in a circle. As you Rosca more and more, your level will rise, regardless of your credit score. We only use your credit score to get you started. As your level gets higher, you will be able to participate in lower fee, lower interest circles.
Why would a Diamond level participate in a Copper circle?
A Copper circle will operate at a higher interest rate, which means that being in the latter half of the circle will allow you to collect more interest! You can put your money to work gaining more interest, but there is a higher risk of a default in a Copper circle as opposed to a Platinum one. Higher risk, higher interest.
Do You Operate Outside Of The USA?
Currently we do not operate outside of the US.
What Are The Minimum Requirements For Signing Up?
A valid Social Security Number and a US bank account in your name.
If we didn't answer your question here, please email us at support@roscafinance.com Bank services are provided by Evolve Bank, Member FDIC, through our banking software provider, SynapseFI. To report a complaint relating to the bank services, email help@synapsefi.com.