Hi msdirect,
The Latino ?club? is called La Tanda, a rotating credit
association. It is very popular in Latin America and among the
Hispanic community in the US. This kind of ?club? is not exclusive to
Latinos. ?Chit Funds? in India and ?Tontine? in West Africa have been
around for years.
?Microfinance is a relatively new term. But most societies and
cultures have a long and rich history of traditional or informal
savings and credit arrangements. The "susus" and "Tontine" of West
Africa, the "chit funds" in India, the "tandas" in Mexico, the partner
in Jamaica or the legion of savings clubs and burial societies found
in all parts of the world have operated for centuries (probably since
the introduction of currency). In the late 19th century, various types
of larger and more formal savings and credit organizations emerged in
Europe and were organized primarily amongst the rural and urban poor.
These institutions were known as People's Banks, Credit Unions,
Housing Societies and Credit Co-operatives.?
http://www.stfx.ca/institutes/coady/text/About_publications_presentations_Jamaica.html
?Tanda is a Spanish term for a rotating credit association.?
http://www.utexas.edu/lbj/faculty/robles/research/pdf/EITC_Briefing_Report.pdf
The length of time most Latino tandas run is 40 weeks, but this is
variable with each club, as is the amount of money handled. The way
it works in areas where I have lived is thus:
Someone starts ?una tanda? by discussing it with people that are
known and trusted. For simplicity, let?s use 10 people. Each
participant is assigned a number.
We have people now, numbered 1-10.
Each person contributes the same amount of money, a fixed amount.
Let?s again, for simplicity?s sake, use $10 a week.
So, we have $100 a week to be collected. The collected funds can
be distributed weekly or monthly. For this example, we will distribute
the funds weekly.
Person #1 will receive $100 the first week, Person #2 receives
the entire $100 the second week, and so on.
Some communities collect much larger sums, and have more people. The
participants may collect just once during the run of the tanda, or
weekly or monthly. Rarely do people default. I am told that if a
person does not pay, they lose the money they have contributed till
then. Because tandas are usually made up of people that know and trust
each other, non-payment is not much of an issue. Most participants are
careful to pay, as no one wants to lose privileges for the future, and
no one wants to be blacklisted!
For large groups of people who, for whatever reason, do not have
access to banks and financial institutions, this works extremely well,
with no interest, and little risk. I have even heard of businesses,
homes and cars financed this way.
One of my Mexican neighbors utilized a Tanda last year. Her in-laws
were coming from Mexico, and she had no furniture for the guest room,
and no money with which to make a large purchase. Because of her
immigration status, neither she nor her husband were able to have a
bank account, and they made too little to have a credit card. They
signed up for a monthly tanda, requesting a number near the top of
the list. By being near the top of the list, they would receive the
lump sum of $1,000 before the in-laws came to visit. After the
furniture was purchased, my neighbors paid their monthly $100 tanda
fee for 10 months. This enabled them to make a large purchase, and pay
it off over 10 months, with no interest.
My daughter spent 7 months traveling in Central America a few years
ago, and saw a tanda in action. This tanda took place in a small,
tightly knit community in Guatemala, where everyone knew and trusted
everyone. The tandas were almost always run by women in this town. The
reason, as told to my daughter, was that women are more in need of the
funds, and women were more responsible than the men!
This Guatemalan tanda consisted of women who were friends, family, and
neighbors. The money was always used to open a stall in the street
market, or to improve an existing small business, usually artesania,
weaving and crafts. Defaults rarely occurred, as the women were very
proud to be a part of this informal financial club! On the rare
occasion that someone defaulted, the other women shamed the non-payer
by discussing the situation with family and neighbors. If necessary
the other tanda members would call for a boycott of the offender?s
business until the money was paid up!
?Some women also helped mobilize revolving credit cooperatives between
neighbors. These informal credit organizations (tandas) rely on trust
and obligation between groups of friends and kin in the community
(Stephen 1991; Kanaiaupuni 1995). Other studies report similar
activities of nonmigrant women in Oaxaca:? Page 21
http://www.ssc.wisc.edu/cde/cdewp/2000-13.pdf
?At the same time, the Mexican populace is altering the culture, by
introducing the Spanish language, another way of life, and traditional
Mexican practices, like tandas (rotating credit associations) and
compadrazgo (fictive kin) ties.?
http://www.jsri.msu.edu/RandS/research/irr/rr27.html
?Once in the United States, Hispanics reproduce and adapt their
cultures4 to their new
life in the United States?food, language, some customs. Social
ties?tandas (group loan funds) for loans, music, dress, cars, exchange
of goods, and ceremonial occasions? Page 12
http://www.agnesscott.edu/pdf/facultypubs/mrees/spanishsvcs_guide.pdf
A story, in Spanish about ?una tanda?
http://romero_chumacero.tripod.com.mx/laura.mendez.de.cuenca/id11.html
I hope this has helped you! Please request an Answer Clarification,
before rating, if any part of my answer is unclear. This will enable
me to assist you further, if possible.
Regards,
crabcakes
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La Tanda + Latino community |
