Tanda (association)

A tanda is the Latin American term for an informal rotating savings and credit association (ROSCAS). They are operated globally, but have over 200 different names that vary from country to country. They are also known as cundinas (Mexico), susu/Osusu (West Africa and the Caribbean), hui (Asia), juntas (Peru), pollas (Chile), pandeiros (Brazil), paluwagan (Philippines), Stokvel (South Africa) or quiniela. An English name for such an association is a partnerhand. In short, a tanda is a form of a short-term no-interest loan among friends.

A tanda may be managed in different ways. The way it usually works is a group of people that know each other get together to collect money (either weekly, monthly, yearly) to help each other financially. Participants can come up with any rules as long as they benefit the group. Usually there is an amount of money and number of people in the group that they all agree to in order to have cash right away. When they come to an agreement of who will be in the tanda and how much it will be (either weekly, monthly, yearly), they have to come up with the order of whom is going to receive the money. Participants can either raffle the numbers or make the decision in who needs the money most. It all depends on the group's decisions.

As an example, a tanda is formed between ten friends and family. Each member gives USD$100 every two weeks to the group's organizer. At the end of the month, one participant gets the "pot", $2000. This continues until each member has received the pot.

Tandas are formed for many reasons, but often because at least one member is in need of money to pay a debt right away, or an emergency arises. But they can also be formed with no pressing financial obligations.

Among Mexicans, these forms of informal savings associations play an important role sustaining the livelihood of many people living in both Mexico and the United States. Importantly, tandas are significant cultural practices among other Latino and Chicano populations in the U.S. According to cultural anthropologist Carlos Vélez-Ibáñez – the first scholar to critically examine this cultural practice among Mexicans – tandas are based on mutual trust, or confianza. As Vélez-Ibáñez explains, confianza "shapes the expectations for relationships within broad networks of interpersonal links, in which intimacies, favors, goods, services, emotion, power, or information are exchanged".

...
Wikipedia