How Circles Work

What Is a Circle?

A Circleis a group of people who know and trust each other—family, friends, or community members—who come together to pool their money and lend to one another. It's based on the traditional ROSCA (Rotating Savings and Credit Association) model that communities across Africa, the Caribbean, Latin America, and Asia have used for generations.

Think of it like a group savings account where members can also borrow from the shared pool. Everyone contributes a fixed amount regularly, and members can take turns accessing the pooled funds when they need them—whether for an emergency, a business opportunity, or a personal goal.

Three Circle Types

Trebanx supports three types of Circles, each designed for different levels of trust and group size:

Each Circle type comes with recommended default settings during setup, but all rules can be customized to fit your group's needs. See our Circle Governance Framework for full details.

How It Works

A Circle is a group of trusted individuals who pool their money together and lend to each other. This model, known as a Rotating Savings and Credit Association (ROSCA), has been used by communities around the world for generations.

Trebanx digitizes this tradition, providing transparency, automated tracking, and secure payment processing through Stripe—while keeping the human trust at the center.

1. Creating a Circle

Anyone can create a Circle. During setup, you'll configure:

• Circle name: A clear name helps members recognize your circle
• Monthly contribution: How much each member contributes (e.g., $50, $200)
• Interest rate (APR): The annual rate charged on loans
• Reserve ratio: Optional safety buffer for defaults
• Cycle length: How long the circle runs (typically 12 months)

After creating your circle, you'll receive an invite link to share with trusted friends and family.

2. Joining a Circle

To join an existing circle, you need an invite link or code from the circle organizer.

• Click the invite link or enter the code on the Join page
• Review the circle's rules (contribution amount, APR, etc.)
• Create an account if you don't have one
• Complete identity verification (required for all members)
• Link a bank account for contributions and payouts

Important: Only join circles with people you know and trust. Member-to-member lending relies on personal relationships and accountability.

3. Making Contributions

Contributions are the foundation of every circle. When you contribute:

• Funds are pooled with other members' contributions
• The pool becomes available for members to borrow from
• Your contribution history is tracked transparently
• Automatic contributions can be set up for convenience

All payments are processed securely through Stripe. Your bank details are never stored on Trebanx servers.

4. Borrowing from the Pool

Members can request loans from the pooled funds. The process depends on your circle's governance rules:

• Request: Submit a loan request with amount and purpose
• Approval: Automatic approval or member voting (based on circle rules)
• Disbursement: Approved funds are transferred to your bank account
• APR: You repay the principal plus the circle's agreed APR (interest rate)

Loan limits may apply based on available pool funds, your contribution history, and circle policies.

5. Repayment

When you borrow from the circle, you commit to repaying according to the agreed schedule:

• Repayment schedules are set when the loan is approved
• You can set up automatic repayments or pay manually
• Interest accrues on the outstanding balance
• Your repayment history affects your standing in the circle

Late or missed paymentsare handled according to your circle's governance rules. Consistent repayment builds trust with your circle members.

6. How Decisions Are Made

Every Circle is self-governed by its members. Decisions are made through transparent voting on the Trebanx platform. Each member gets exactly one vote.

Voting Thresholds

• Loan approval: Majority vote or automatic (per Circle rules)
• New member approval: Majority or unanimous vote
• Member exit: Simple majority (50%+1)
• Charter amendments: Supermajority (2/3)
• Member expulsion: Supermajority (2/3)

All votes are transparent—every member can see how others voted. Standard votes have a 48-hour window. For complete governance details, see the Circle Governance Framework.

7. What Happens with Defaults

A default occurs when a borrower fails to make loan payments after the grace period expires. Here's what happens:

The Default Process

• Notification: The borrower and all Circle members are notified of the missed payment
• Grace period: The Circle's Charter defines a grace period (0–14 days) to make up the payment
• Circle vote: Members vote on how to handle the default (extend terms, restructure, or write off)
• Loss allocation: If the loan can't be recovered, losses are shared per Circle rules

How Losses Are Shared

• Reserve fund first: If the Circle has a reserve, it absorbs losses before Members are affected
• Proportional sharing: Remaining losses are split based on each member's contribution
• Write-off vote: A 2/3 supermajority can vote to formally write off an unrecoverable loan

This is why Trebanx recommends only participating with people you trust and money you can afford to lose. For complete risk details, see our Risk Disclosures.

8. Earning Interest

When borrowers repay with interest, that interest is distributed to contributing members:

• Interest earnings are calculated based on your contribution share
• Losses from defaults are subtracted before distribution
• Trebanx takes a small percentage fee on net earnings only
• Remaining earnings are distributed to members pro-rata

Example:If your circle earns $1,000 in interest and you contributed 10% of the pool, you'd earn approximately $90 (after Trebanx's 10% fee on net earnings).

9. Understanding Risks

Key risks to understand:

• Default risk: Borrowers may not repay their loans
• Liquidity risk: Your funds may be locked during loan terms
• No guarantees: Trebanx does not guarantee repayment
• No FDIC insurance: Active circle funds are not insured

For complete information, please read our Risk Disclosures.

Get Started

Ready to start your circle journey? Join Trebanx today and connect with your trusted community.