Abstract:
This method brings together users by use of microprocessor based machines over an online network in order to participate as a group in the acquisition of assets through cooperation. The proposed invention builds upon the Rotating Savings and Credit Association (ROSCA); removing its inherent limitations as well as provide essential services for commercial use.

Description:
[0001]    This application claims priority to prior U.S. provisional application No. 61/212,107, filed Apr. 7, 2009, entitled Method to Facilitate Credit and Savings, which is incorporated herein in its entirety by this reference made thereto. 
     
    
     FIELD OF INVENTION 
       [0002]    The invention relates generally to microfinance and a social network. The proposed invention provides a method of facilitating credit and savings as a rotating credit and savings association over an online network by use of microprocessor based machines. 
       BACKGROUND OF INVENTION 
       [0003]    With its roots found around the world, the Rotating Savings and Credit Association (ROSCA) is regularly used by millions in private group settings as a means of mobilizing credit and savings at the grassroots level. This method has been in use in private groups for centuries and its widespread use and success can be attributed to the great benefits it provides its participants. ROSCAs are a nontraditional means for its participants to acquire assets through the power of cooperation. 
         [0004]    While traditional ROSCAs offer many benefits for its users, there are several inherent limitations which limit its use and scalability. The proposed invention removes the limitations of the traditional ROSCA, thus introducing many great improvements to the traditional model as well as scalability into the system. 
       BRIEF SUMMARY OF INVENTION 
       [0005]    A method and apparatus are described for conducting Rotating Credit and Savings Associations (ROSCAs) over an online network through the use of microprocessor based machines as well as key improvements to the traditional ROSCA method. The traditional method has several key limitations which inhibit its ability to be offered commercially. 
         [0006]    Two key disadvantages to the traditional model are a lack of trust between its participants and an inefficient infrastructure. The proposed invention has overcome both of these shortcomings by streamlining the entire process over an online network; increasing its ease of use as well as allowing participants from distinct geographical locations to participate together. A proprietary risk rating algorithm will be employed creating a standard of trust among users. 
         [0007]    In addition, the proposed invention will improve upon the traditional method by employing important services such as credit reporting of all transactions which will help participants use the proposed invention for the improvement of credit scores. 
     
    
     
       BRIEF DESCRIPTION OF THE DRAWINGS 
         [0008]      FIG. 1  is a schematic flow diagram illustrating a preferred method of creating the method network in accordance with the principles of the present invention. 
           [0009]      FIG. 2  is a schematic flow diagram illustrating a preferred method of creating a group setting within the method network in accordance with the principles of the present invention. 
           [0010]      FIG. 3  is a schematic flow diagram illustrating a preferred method to participate in the method in accordance with the principle of the present invention. 
           [0011]      FIG. 4  is a schematic flow diagram illustrating a preferred method of distributing operating and insurance expenses from the user contributions. 
           [0012]      FIG. 5  is schematic flow diagram illustrating a preferred method of reporting information to the credit repositories on behalf of the network users. 
           [0013]      FIG. 6  is schematic flow diagram illustrating another variation of the preferred method when managing late users. 
           [0014]      FIG. 7  is schematic flow diagram illustrating another variation of the preferred method when managing default network users. 
           [0015]      FIG. 8  is schematic flow diagram illustrating a preferred method of completing the method. 
       
    
    
     DETAILED DESCRIPTION OF THE PREFERRED EMBODIMENT 
       [0016]    Turning now to the drawing, in which like reference characters indicate corresponding elements, attention is directed to  FIG. 1  in which the method  10  begins by finding a location to house  11  the method hardware, such as company servers and/or any micro-processor based machines  12 . A server is a micro-processor based machine that will store the method  10  and any pertinent data required to facilitate the method  10 . The servers  12  will also allow the method  10  to communicate  13  with other micro-processor based machines  12  and thus create a network  14  for the method  10 . The method&#39;s network  14  may consist of a plurality of user&#39;s  15  and/or third party companies  16  accessing the network  14  via their individual micro-processor based machine  12 . 
         [0017]    The public will be notified  17  of the availability to access the network  14  and participate in the method  10 . This can be accomplished by television media, print media, word of mouth or any other reasonable means of informing people that the method network  14  is available for use. The public will subsequently access  18  the network  14  and form peer-selected groups  20  ( FIG. 2 ) of any plurality to directly participate in the method  10 . 
         [0018]    Turning your attention to  FIG. 2 , in this variation, user  100  connects to the network  14  and creates a unique group setting  20  within the network  14 , thus becoming the group setting coordinator. User  100  decides upon variables  21  for the method  10  ( FIG. 1 ) which make the method  10  ( FIG. 1 ) unique to this group setting  20  and which may include disbursement amount, length of interval, number of intervals and minimum risk rating standards  21 . Each user will have their user data &amp; history  22  stored on the servers  12  ( FIG. 1 ). This data can be used to generate a network user&#39;s unique proprietary risk rating(s)  23  visible to all users within the network  14 . The proprietary risk rating(s)  23  will help users  15  ( FIG. 1 ) determine the associated risk of other prospective users  15  ( FIG. 1 ) in helping to determine acceptance into their peer-selected group  20 . Users  15  ( FIG. 1 ) are encouraged to achieve a positive risk rating in order to represent a low risk to other network users  15  ( FIG. 1 ). This unique group setting  20  created by user  100  will then be available to all users  15  ( FIG. 1 ) to participate in this particular group setting  20 . 
         [0019]    User  100 , user  101  and user  102  connect to the network  14  and congregate into the group setting  20  created by user  100  indicated by arrowed lines A. Users on the network  14  can create a unique group setting  20 , such as user  100 , or participate in a currently existing and/or open group setting  20  within the method network  14 , such as user  101  and user  102 . According to the settings defined by the coordinator  100  the group setting  20  will be closed after user  100 , user  101  and user  102  are a part of this group setting  20  and the group will no longer be accepting additional users  15  ( FIG. 1 ). 
         [0020]    A group setting fingerprint  24  will subsequently be created for this group setting  20 . This unique fingerprint  24  will be used to keep track of the method variables  21  on the servers  12  ( FIG. 1 ) as indicated by arrowed line B, i.e. group setting users, interval contribution, start/stop date, disbursement amount, number and length of intervals and disbursement order. 
         [0021]    Turning to  FIG. 3 , user  100 , user  101  and user  102  are asked to agree to this group setting variation  20  ( FIG. 2 ) and commit  30  to the method  10  ( FIG. 1 ), thus locking them into a commitment for the period between the start  31  and stop  38  dates predefined by the group setting  20  ( FIG. 2 ). 
         [0022]    User  100 , user  101  and user  102  of this group setting  20  ( FIG. 2 ) will contribute a fixed amount of a commodity at the agreed upon interval with the predefined start  31  and stop date  38 . 
         [0023]    Briefly turning to  FIG. 4 , a percentage of every contribution will go towards company operating expenses  40  and insurance premiums  70 . The insurance  70  is used to protect the users in case any plurality of the users in a group setting  20  ( FIG. 2 ) default on their commitment  30  ( FIG. 3 ). This insurance  70  can either be an outside third party company, an in-house self insured variation or another user within the network. 
         [0024]    Returning to  FIG. 3 , User  100 , user  101  and user  102  will take turns at each interval receiving the full collected contribution until all users have received their lump sum, also known as the disbursement. Depending on the interval in which user  100 , user  101  and user  102  receive their disbursement, they will alternate between being lenders and borrowers. The disbursement order in which the users receive their disbursement is decided upon by the group at the start date  31  of each method  10  ( FIG. 1 ) and may be determined by lottery, mutual agreement, user risk or any other reasonable method. 
         [0025]    The first interval  32  of this method will commence immediately on the start date  31 . Based on these specific group settings  20  ( FIG. 2 ) predefined disbursement order, users  101  and user  102  will have their first interval contribution collected from their preferred contribution location  35  and then deposited into a company secure location  36  indicated by arrowed lines A. All users will predefine their preferred contribution location  35  from which the method will collect their interval contribution. The preferred contribution location can be a specific physical location, a commodity cache or any other acceptable secure location. Similarly, the company secure location  36  can be a specific physical location, a commodity cache or any other acceptable secure location. 
         [0026]    Turning to  FIG. 5 , if the user(s) contributions are collected on schedule as indicated by arrowed lines A, a positive mark  51  will be reported to the credit repositories, Experian, Equifax, Transunion or any other acceptable third party credit bureau  50 , on the user&#39;s behalf. 
         [0027]    Turning to  FIG. 6  shows that if the method  10  ( FIG. 1 ) is unable to collect the interval contribution from user  101  and/or user  102 ′s preferred contribution location  35  at the scheduled interval indicated by arrowed lines A, the disbursement to user  100  will be held for the previously accepted grace period  60  also indicated by arrowed lines A. The method  10  ( FIG. 1 ) will repeatedly attempt to collect the scheduled interval contribution from the tardy users, specifically user  101  and/or user  102 . If the method  10  ( FIG. 1 ) is able to collect the interval contribution from the tardy users within the grace period  60  indicated by arrowed lines B, the contribution will be deposited into the company&#39;s secure location  36  also indicated by arrowed lines B. Quickly turning to  FIG. 5 , a positive mark  51  will be reported to the credit repositories  50  for the user(s). 
         [0028]    Now turning to  FIG. 7 , if the method  10  ( FIG. 1 ) is unable to collect the contribution from user  101  and/or user  102 ′s preferred contribution location  35  during the grace period  60 , indicated by arrowed lines A, the insurance  70  will deposit the delinquent contribution into the company secure location  36  indicated by arrowed lines B, and the delinquent user(s), specifically user  101  and/or user  102 , will be removed  71  from the group setting  20  ( FIG. 2 ) and will subsequently have a chance to redeem themselves by contributing a penalty. Looking to  FIG. 5 , the delinquent user  101  and/or  102  will have a negative mark  52  reported to the credit repositories  50 . 
         [0029]    Returning to  FIG. 7 , the insurance  70  will take the place of the delinquent user(s)  101  and/or user  102  in the group setting  20  ( FIG. 2 ) for the remainder of this specific method  10  ( FIG. 1 ). 
         [0030]    Turning back again to  FIG. 3 , user  100  will receive the predefined disbursement once all necessary contributions are collected in the company secure location  36  as indicated from arrowed lines A, from any combination of user  101 , user  102 , or the insurance  70  ( FIG. 7 ). The method  10  ( FIG. 1 ) will deposit the disbursement into user  100 ′s previously selected disbursement secure location  37  as indicated by arrowed lines A. All users will predefine a secure location  37  for their disbursement. This secure location can either be a specific physical location, a commodity cache or any other protected location. This concludes the first interval  32  of this specific group&#39;s method  10  ( FIG. 1 ). 
         [0031]    Continuing on  FIG. 3 , the second interval  33  of this specific group&#39;s method, all users in this group setting  20  ( FIG. 2 ) have shifted one position where user  101  is now due the disbursement. All other users of the group; specifically user  100  and user  102  make their interval contribution, indicated by arrowed lines B. Any and all previously mentioned grace periods and insurance protection against tardy or default users will be applied, as necessary, for every interval in a group setting  20  ( FIG. 2 ). 
         [0032]    Continuing on  FIG. 3 , the schematic diagram represents the final interval  34  on the stop date  38  of the specific group&#39;s method. All users in this group setting  20  ( FIG. 2 ) have shifted one position where user  102  is now due the disbursement, indicated by arrowed lines C. All other users of the group; specifically user  100  and user  101  make the final interval contribution, also indicated by arrowed lines C. 
         [0033]    Turning to  FIG. 8 , this is a schematic diagram representing the completion sequence for this group which will commence immediately following the final interval  34 . The completion sequence encompasses an accountability system and a user commitment release  81 . The accountability system will have user  100 , user  101  and user  102  perform a peer evaluation  80  of the other users in this group setting  20  and/or the company servers  12  ( FIG. 1 ) will perform an automated evaluation  80 . The peer evaluation and/or automated evaluation  80  will evaluate the users in this specific group, indicated by arrowed lines A, with respect to the quality of the commodity being contributed, timely or untimely contribution habits, or their respect for their fellow users. 
         [0034]    The information collected via the accountability system will update the user data and history  22  for user  100 , user  101  and user  102  on the company server  12  ( FIG. 1 ) in order to update their individual proprietary risk ratings  23 . 
         [0035]    User  100 , user  101  and user  102  are now released  81  from their commitment to this group setting  20  ( FIG. 2 ) and are free to exit the network  14  ( FIG. 1 ) or participate in a new method  10  ( FIG. 1 ). 
         [0036]    For purposes of illustration, only three users were shown directly participating in the method  10  ( FIG. 1 ); however the method  10  ( FIG. 1 ) will always have the necessary intervals required to accommodate any plurality of users  15  ( FIG. 1 ) within the method network  14  ( FIG. 1 ) and more specifically, in any unique group setting  20  ( FIG. 2 ). 
         [0037]    The users within the method network  14  ( FIG. 1 ) may have the option of actively participating in more than one group setting  20  ( FIG. 2 ) at a time and/or the option of receiving more than one disbursement per unique group setting  20  ( FIG. 2 ) so long as the corresponding number of contributions are made per interval.