kelelas

Kelelas is a term primarily used in some parts of West Africa, particularly in Ghana and Nigeria, to refer to a type of traditional or informal money lending or saving system. It is a form of rotating savings and credit association (ROSCA). In a typical kelelas system, a group of individuals contribute a fixed amount of money regularly, for example, weekly or monthly. The total sum collected in each round is then given to one member of the group. The order in which members receive the money is usually predetermined or decided through a lottery or rotation.

The primary benefit of kelelas is that it provides members with access to lump sums of money that they might not be able to save on their own. This money can be used for various purposes, such as starting a small business, paying school fees, or covering unexpected expenses. Kelelas operates on trust and community solidarity, as members rely on each other to fulfill their obligations. It is often informal and undocumented, functioning through mutual understanding and social relationships.

While kelelas can be a valuable financial tool for many, it also carries risks. If a member defaults on their contributions, it can disrupt the entire system and cause financial hardship for others. The success of kelelas heavily depends on the reliability and commitment of all participants. Despite the rise of formal financial institutions, kelelas remains a significant informal financial mechanism in many communities, reflecting the importance of social networks in economic activities.