Cooperation among human societies can be traced back to the ancient times when people started to work together to enhance their
efficiency in hunting, gathering, shelter construction and other activities. Historians have discovered evidence indicating cooperation
among people in ancient civilizations like Greece, Rome and Egypt. Anthropologists have also uncovered evidence suggesting that
Babylonians had practiced cooperative farming, while informal saving and loan associations had been practiced in ancient China (www,
Umanitobia, 2011). Those informal associations are still widely used, especially in low income countries. Bouman (1994) classifies the functions of informal institutions into three: provision of security or insurance, economic function, and socialization. Some informal
institutions serve more than one function (Sandsör, 2010). Rotating Saving and Credit Associations (RoSCA) is an example, which is
considered to be economic, social and cultural institutions (Sandsör, 2010; Bouman, 1995).

RoSCAs, one of the oldest saving institutions in the world (Gugerty, 2007), are associations formed by a group of people willing to
make a regular contribution to a fund which will be given to each member in whole or part on rotation basis (Ardener, 1964). It is an
institution that aims at goal directed and planned savings yet fits into the pattern of the community (Geertz, 1962; Gugerty, 2007).
In Ethiopia, a country where it is not uncommon to find cooperative activities among the people (Engdawork, 1995), informal selfhelp institutions have existed for long in their own version. The Ethiopian version of RoSCA is called equb. The small equbs could be
started within a group based on strong ties like friendship, business associates, school mates, or within the neighborhood. In large equbs,
individuals that do not have close relationship might become members though each member needs to be known by at least some other
members in the group, and their moral standing should be known by the community (Mauri, 1987).