The wide variety of collaborative finance resources may vary not only in their organizational and operational aspects but also by geographical region, share of the financial market, etc.
It is precisely this heterogeneity that enables the informal savings and credit activity to profitably reach those income-groups not served by commercial banks and other financial institutions.
It is their informality, adaptability and flexibility of operations – characteristics which reduce their transaction costs and confers upon them their comparative advantage and economic rationale.
The Following are the features of collaborative finance that make it attractive to low income households: The concept has been championed by Don Tapscott and Anthony D. Williams, co-authors of the book MacroWikinomics: rebooting business and the world.
"[2] ROSCAs are essentially a group of individuals who come together and make regular cyclical contributions to a common fund, which is then given as a lump sum to one member in each cycle.