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Bank-Insured RoSCA for Microfinance: Experimental Evidence in Poor Egyptian Villages
Last registered on December 06, 2016


Trial Information
General Information
Bank-Insured RoSCA for Microfinance: Experimental Evidence in Poor Egyptian Villages
Initial registration date
December 06, 2016
Last updated
December 06, 2016 6:10 PM EST
Primary Investigator
Northwestern University
Other Primary Investigator(s)
PI Affiliation
Rice University and James A. Baker III Institute for Public Policy, United States
PI Affiliation
American University in Cairo
PI Affiliation
University of Illinois - Urbana Champaign
Additional Trial Information
Start date
End date
Secondary IDs
Microfinance institutions (MFIs) have continued to grow over the past few decades, both in numbers of clients and portfolio sizes. The growth of these MFIs has enabled greater access to credit in many of the world's less developed nations. However, recent studies have shown that very many of the poor - especially Muslims - remain unbanked. Confounding this problem in many Muslim countries is the poor's propensity to reject microfinance, when available, on religious grounds. In this paper we develop an alternative microfinance model which aims to establish credit unions for the poor in which the bank plays the role of a guarantor in the familiar rotating savings and credit association (RoSCA). We test the performance of this model against a stylized sequential Grameen-style microcredit provision in a "laboratory experiment in the field" conducted in poor Egyptian villages. Our model of bank-insured RoSCAs is shown to solve coordination-failure problems that may otherwise prevent the spontaneous development of informal RoSCAs in practice. Empirically, our bank-insured RoSCA model generated significantly higher take up and repayment rates than the Grameen model. This suggests that this model, by overcoming the religious barriers to credit, can be a useful alternative to Grameen-style microfinance.
External Link(s)
Registration Citation
El-Gamal, Mahmoud et al. 2016. "Bank-Insured RoSCA for Microfinance: Experimental Evidence in Poor Egyptian Villages." AEA RCT Registry. December 06. https://doi.org/10.1257/rct.1814-1.0.
Former Citation
El-Gamal, Mahmoud et al. 2016. "Bank-Insured RoSCA for Microfinance: Experimental Evidence in Poor Egyptian Villages." AEA RCT Registry. December 06. https://www.socialscienceregistry.org/trials/1814/history/12276.
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Experimental Details
Each session is randomly assigned to be either a Grameen-style game or a RoSCA game. In each game, players are partnered up and Player 1 is endowed with a specific amount of initial capital. Players have the opportunity to make a capital investment, but must take out a loan to do so. If Player 1 takes out a loan, their default or repayment behavior affects the options available to Player 2 in the future, and vice versa.

In the Grameen-style game, players borrow from and are punished by the bank. However, after the first period, players can borrow from each other to repay the bank.

In the RoSCA game, if the players mutually decide to play the game and invest capital, they pay a small fee to the bank upfront which will guarantee the RoSCA against default. Player 1 receives the first RoSCA loan. If they default, they receive a loan from the bank to repay the RoSCA (which they can either repay or default). If Player 1 repays the RoSCA, Player 2 will receive a loan from the RoSCA, and will face the same choices as Player 1.

The games differ because in the Grameen-style game, bank loans occur first, with player support secondary. In the RoSCA game, this pattern is reversed, with intra-player support first, and bank loans secondary. For more detail on the games, please refer to El-Gamal et al. (2015).
Intervention Start Date
Intervention End Date
Primary Outcomes
Primary Outcomes (end points)
Proportion of participants who play, Take-up rates, Repayment rates
Primary Outcomes (explanation)
Secondary Outcomes
Secondary Outcomes (end points)
Secondary Outcomes (explanation)
Experimental Design
Experimental Design
We conduct laboratory experiments in the field, using very poor subjects in rural Egypt who are eligible for microloans, and compare the take up and repayment rates of randomly assigned subjects under two microfinance designs - a sequential Grameen-style microlending structure as well as our proposed alternative, a bank-insured fixed-order RoSCA. Subjects participated in experimental games, modelled after a Grameen-style or RoSCA loan structure. Subjects who chose to participate in the games kept the money in their possession at the end of the game. After the game we administered, subjects answered few survey questions to gather demographic data for use in our analysis.
Experimental Design Details
Randomization Method
Done in office by computer
Randomization Unit
Was the treatment clustered?
Experiment Characteristics
Sample size: planned number of clusters
25 experimental sessions
Sample size: planned number of observations
354 subjects
Sample size (or number of clusters) by treatment arms
RoSCA: 15 sessions
Grameen-style: 10 sessions
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
IRB Name
IRB Approval Date
IRB Approval Number
Post Trial Information
Study Withdrawal
Is the intervention completed?
Intervention Completion Date
February 28, 2010, 12:00 AM +00:00
Is data collection complete?
Data Collection Completion Date
February 28, 2010, 12:00 AM +00:00
Final Sample Size: Number of Clusters (Unit of Randomization)
25 sessions
Was attrition correlated with treatment status?
Final Sample Size: Total Number of Observations
344 subjects
Final Sample Size (or Number of Clusters) by Treatment Arms
Grameen-style: 136 subjects RoSCA: 208 subjects
Data Publication
Data Publication
Is public data available?
Program Files
Program Files
Reports and Papers
Preliminary Reports
Relevant Papers
Bank-insured RoSCA for microfinance: Experimental evidence in poor Egyptian villages
El-Gamal, Mahmoud, Mohamed El-Komi, Dean Karlan, Adam Osman. "Bank-Insured RoSCA for Microfinance: Experimental Evidence in Poor Egyptian Villages. Science Direct 2014; .doi.org/10.1016/j.jebo.2014.02.025.