Money pool is one of the oldest savings schemes in the world, in which each pool member pays the same amount of money each month for a certain length of time. Each individually member receives the pool amount in turn.
Chit funds and online savings and credit associations are other names for Money pools (ROSCAs). These types of savings plans are mostly seen in poorer countries with limited access to finance. Money pooling is still a part of life, and it is a classic example of peer-to-peer lending or people assisting people.
Money Pool means a pool of funds prescribed by ESI, as an agent for the People taking part, consisting merely of available cash from the Participants’ treasuries, which will be loaned on a short-term grounds to one or both of the Participants or otherwise invested in the Money Pool Portfolio by ESI, as an agent, in the manner described in Section 2.08 hereof.
Typically money pools contain a group of family members, employees, or close friends who agree to contribute equally to a pool on a monthly (or frequent) basis. The agreed-upon amount could be little, such as $50 every month, or large, such as $200 every two weeks, for a set period of time.
The money manager then divides the pot, or cash payment, among the ROSCA members each month until the pool is drained. If 12 persons invest $1,000, each receives $1,000 with no interest paid or earned.
Users of the Money Pool
People in India have been pooling money for over seven centuries, and it is still a common saving and borrowing arrangement among the following:
- Lower-income individuals
- People with a low CIBIL score
- People who are unable to access banking services
- Poverty affects people all across the world.
- Individuals seeking to borrow or preserve money
Advantages of a Money Pool?
- People build trusted financial communities with people they trust, which they may rely on in times of unforeseen needs.
- There is no paperwork required to borrow money from the money pool.
- People who participate in a money pool organization are more likely to create and accomplish savings goals.
- Money pool serves as both a formidable borrowing and saving device.
- Cheaper Loans: Because the borrowing interest rate is decided by the participants rather than by an external agency, they can set it substantially cheaper than the banks.
- Larger Yield: Contributions to such plans receive higher returns than Fixed Deposits or Recurring Deposits.
PayPal introduces Money Pools, where people may pool their money to buy products.
PayPal has entered the debate in an attempt to offer its own solution. Money Pools is a tool that allows people to establish sites to allow their contacts to fundraise for a certain item or event, such as buying a group present, going on a group trip, or having housemates share the rent.
PayPal has now become available in 16 countries: Australia, Austria, Belgium, Canada, Denmark, France, Germany, Italy, the Netherlands, Norway, Poland, Spain, Sweden, Switzerland, the U.k., and the United States. Anyone with a PayPal account in these areas can start or contribute to a Money Pool. (You can’t use it unless you have a PayPal account.)
To be clear, this is not open-ended, crowdsourced fundraising like GoFundMe or similar sites. Similar to what Tilt allowed you to accomplish, it’s for specific things or efforts among family and friends.
Money Pools were established to give the millions of PayPal P2P users a more personalised and organised method to share expenses with more than one family member or friend for things like vacation, gifts, celebrations, and even recurrent expenses like rent and utilities,” according to PayPal. “Unlike crowdfunding, Money Pools are not designed to assist fundraising for activities like product development, and organisers agree not to give perks, rewards, or other incentives in exchange for donations to a Money Pool.”