Microfinance System As Mutual Help Networks: A Comparison between Japan and the Pacific Islands Region

This paper presents microfinance as a traditional system of mutual help networks in Japan and the Pacific Islands region, known as “rotating savings and credit associations (ROSCAS),” which also exist in other areas. The presentation discusses the findings from an interview survey and fieldwork conducted in Japan, the Republic of Palau, the Federated States of Micronesia, and the Republic of the Marshall Islands. In Japan, ROSCAS are known as tanomoshi or mujin. In the Pacific Islands, they go by various names such as muzing, mwusing, and mushing, and these can be compared with the well-documented Japanese systems. These systems were introduced to regions without existing microfinance through contact with the Japanese, either before or during the Pacific War. In some instances, Japanese terminology was directly borrowed and used. This can be understood not just as a matter of language but also as a “transfer of mutual help practices,” including their mechanisms. Mutual help practices as spontaneous social order are categorized into three types: reciprocity, such as labor exchange for planting rice or re-roofing houses; redistribution, where community members maintain a common resource pool in exchange for access to goods; and unidirectional help, such as support during funerals and weddings, without the expectation of repayment. The redistribution typically involves labor, goods, and money, with ROSCAS specifically focusing on the distribution of money. The aim of this paper is to demonstrate that ROSCAS are not only economically significant but also socially valuable for fostering friendships and bonds within communities. The economy is embedded in social relations and institutions. The paper concludes by asserting that microfinance, as a form of communal help, plays a crucial role in supporting communities, contrasting with public help and self-help. Modern societies might benefit from reconsidering ROSCAS as a means of rebuilding and developing communities.