Evaluating the Role of Adashe (Traditional Rotating Savings and Credit Associations) In Financing Micro Enterprises in Rural Areas of Bauchi State

Yusuf Mohammed Sani; Habibu Sani; Shehu Umar Said; Idrith Ahmad Yusif; Ali Usman

doi:10.56201/jafm.vol.12.no8.2026.p292.299

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Evaluating the Role of Adashe (Traditional Rotating Savings and Credit Associations) In Financing Micro Enterprises in Rural Areas of Bauchi State

Yusuf Mohammed Sani, Habibu Sani, Shehu Umar Said, Idrith Ahmad Yusif, Ali Usman

Abstract

Access to formal credit remains severely constrained for micro entrepreneurs in rural northern Nigeria, where collateral requirements, distance to bank branches, and documentation burdens exclude the majority of small-scale traders, artisans, and farmers from deposit money banks and microfinance institutions. In this institutional vacuum, Adashe the Hausa variant of the rotating savings and credit association , known elsewhere in Nigeria as Esusu, Ajo, or Etoto has persisted as a dominant informal financing mechanism for centuries. This paper evaluates the role Adashe plays in financing micro-enterprises in rural Bauchi State, synthesising the theoretical and empirical literature on informal finance, social capital, and rotating credit associations, and proposing a research design capable of testing Adashe's contribution to micro-enterprise capital formation, business survival, and growth in the Bauchi context specifically. The review finds that ROSCA participation is consistently associated with improved access to lump-sum capital, enforced savings discipline, and social-network-based credit screening in the wider Nigerian and West African literature, but that rigorous, Bauchi-specific empirical evidence remains scarce, with most Nigerian ROSCA studies concentrated in the Yoruba-speaking South-West. The paper argues that this represents a meaningful empirical gap given Bauchi's distinct socio-cultural, religious, and economic context, and proposes a mixed-methods research design combining a structured survey of Adashe-participating micro-entrepreneurs with key-informant interviews of Adashe group organisers (Ma'aji or Bulaman) to close it.

Keywords

Adashe; Rotating Savings and Credit Association ; informal finance; micro- enterprise financing; social capital; Bauchi State; financial inclusion

References

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Evaluating the Role of Adashe (Traditional Rotating Savings and Credit Associations) In Financing Micro Enterprises in Rural Areas of Bauchi State

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