An ''arisan'' is a form of
Rotating Savings and Credit Association
A rotating savings and credit association (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.
The first academic descrip ...
in
Indonesia
Indonesia, officially the Republic of Indonesia, is a country in Southeast Asia and Oceania between the Indian and Pacific oceans. It consists of over 17,000 islands, including Sumatra, Java, Sulawesi, and parts of Borneo and New Guine ...
n
culture
Culture () is an umbrella term which encompasses the social behavior, institutions, and norms found in human societies, as well as the knowledge, beliefs, arts, laws, customs, capabilities, and habits of the individuals in these groups ...
, a form of
Microfinance.
Generally the ''arisan'' is a social gathering that takes place at a fixed interval (this being an informal social network this may be variable), at each member's home in turn. The rotating ''arisan'' holder (drawn by lots) receives payment from each other member and provides food for those members. In the course of the ''arisan'' the amount paid to other members will equal the amount received when the ''arisan'' is held.
The ''arisan'' can vary from an essential form of credit in poorer social circles, funding an otherwise unaffordable business venture, wedding, or large purchase, to a purely social gathering for rich housewives with the money incidental (although the amounts can be considerable). As a source of finance it represents an alternative to
bank loan
In finance, a loan is the lending of money by one or more individuals, organizations, or other entities to other individuals, organizations, etc. The recipient (i.e., the borrower) incurs a debt and is usually liable to pay interest on that de ...
s and other forms of
credit
Credit (from Latin verb ''credit'', meaning "one believes") is the trust which allows one party to provide money or resources to another party wherein the second party does not reimburse the first party immediately (thereby generating a debt) ...
.
[Hospes, O. (1996). Women's differential use of ROSCAs in Indonesia. In S. Ardener and S. Burman (Eds.). ''Money-go-rounds : The Importance of Rotating Savings and Credit Associations for Women'', pp. 127-148. Oxford: Berg Publishers.]
In general, no
interest
In finance and economics, interest is payment from a borrower or deposit-taking financial institution to a lender or depositor of an amount above repayment of the principal sum (that is, the amount borrowed), at a particular rate. It is distin ...
is payable per se in the ''arisan'', and forms vary regionally within Indonesia. In some cases the ''arisan'' lacks a social element and is simply a means of circulating money between members; in this case the ''arisan'' may take the form of an 'arisan call', known as 'julu julu' or 'jula jula' in Sumatra. The ''arisan'' call involves an auction element, whereby the member receiving the payout each week
[Changing Financial Landscapes in India and Indonesia: Sociological Aspects of Monetization and Market Integration - Heiko Schrader] is determined not by lot, but by bid, those willing to wait till the end of the ''arisan'' receiving the largest payout, while more desperate borrowers will receive less, but get money earlier.
References
{{Authority control
Indonesian culture