Tandas and cundinas (Mexico and south-western USA)

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Tandas and cundinas 🇲🇽 🇺🇸
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Location: Mexico and south-western USA
Definition: Rotating savings and credit associations
Author: Carlos G. Vélez-Ibáñez

Original text by Carlos G. Vélez-Ibáñez

Rotating savings and credit associations (ROSCAS), known as tandas in central and southern Mexico and cundinas in northern Mexico and the Southwest United States, are informal economic mechanisms that enable members to save and, when necessary, to access money.

In its simplest form, a ROSCA might consist of an organiser and four other individuals who agree to contribute a set amount equivalent to, say, US$10 a week. The order in which these sums are distributed may be decided either by lot or by the order in which the members joined. Each person, including the organiser, will receive a one-time payment of $50, and the lifespan of this hypothetical ROSCA will be five weeks. In the words of Shirley Ardener, one of the pioneers in the study of this phenomenon, a ROSCA consists of ‘a core of participants who agree to make regular contributions to a fund which is given, in whole or in part, to each contributor in rotation’ (Ardener 1964:201[1]). From this simple model, however, ROSCAs have evolved into much more complex structural and institutional types, which vary widely in their formality.

ROSCAS are a worldwide phenomenon, with comparable practices found in North America, Africa (see for example esusu in Nigeria), Asia (see gap in Uzbekistan), and Europe (see loteria in Albania). ROSCAS are often (though not always) associated with population migration. That said, the Mexican versions can be both local and trans-border in character.

Originally, ROSCAs were organised by men and developed from forms of agricultural exchange. Women in land-based economies were traditionally excluded from owning land and, other than payment for their labour, had access to few resources. This was for example the case in rural India and Africa, as well as elsewhere. In today’s monetised economies—whether rural or urban, developing or developed—many ROSCAs are in the hands of women (Ardener 1965). Many of the thousands of tandas or cundinas in northern Mexico and the south-western United States are today run by women, who act as managers and well as participants. Women have few resources other than limited wage labour to develop capital for consumption, investment or saving. With credit markets limited—because of low wages, lack of collateral, or attitudinal or market conditions—women must use all available means to provide for their families. Among these are ROSCAs, which can be a means for generating savings in order to create income-producing enterprises. The main strength within networks of women worldwide is social capital and their willingness to extend it to others. This enables and helps to explain the rise of ROSCAs run by women (Velez-Ibanez 2010:15-17[2]).

The data-base cited in this article draws on field-research carried out by the author from 1971 intermittently through to 2008. The first extensive database was compiled in 1978 and 1979, based on ROSCAs identified in Mexico and the United States. Snowball and opportunistic samples generated data on 65 informal and intermediate ROSCAs, four of which may be described as Rotating Credit Associations (RCAs), that is, formally organised institutions. The author’s 1983 book, Bonds of Mutual Trust[3]), was based on this fieldwork. From 2000 to 2009, two intensive field studies used opportunistic and snowball-sampling to gather additional data. This work focused on the US states of Arizona, Southern California and Washington; the Mexican states of Baja California, Sonora and Sinaloa; and the Arizona-Sonora border. This database included 65 new informal ROSCAs and seven RCAs. The entire sample, covering 137 ROSCAs and 25 RCAs representing about 5,000 people, with data gathered from more than 90 informants, ten web pages, countless e-mails and numerous conversations between the author and at least 40 people, covering the area from Seattle in the north-west of the USA all the way to Xalapa, Veracruz in south-west Mexico. The author also participated in three ROSCAs: two in Phoenix, Arizona and one in San Luis Río Colorado, which straddles the Arizona-Sonora border. This last was a complex trans-border organisation, with participants living on both sides of the border and using both Mexican pesos and US dollars as currency (Velez-Ibanez 2010:21-3[4])

The number of individuals participating in informal and intermediate ROSCAs (the latter defined as occurring in institutional settings) is shown in Figure 1. ROSCA members commonly numbered between ten and twelve, with higher numbers in intermediate ROSCAs. Figure 1 (Source: Velez-Ibanez 2010:68[5] )

The amount of contributions (given here in US dollars) is shown in Figure 2 with a contribution of $100 being the most typical, made on a weekly basis for the informal tandas and monthly for the intermediate ones. Figure 2 (Velez-Ibanez 2010:72)

As shown in Figure 3, for the majority of ROSCAs([6])the total ‘fund’ (that is, the amount dispersed or rotated at each turn) averaged between $1,000 and $1,250. Of all the funds dispersed, the highest amount was $10,000 dollars for 4 percent of the sample. This amount was distributed in tandas made up mostly of individuals in business enterprises or larger networks of associates. If, for example, over a period of 40 months 40 individuals made a monthly contribution of $250 each, at each turn one of the 40 could receive $9,750 (the person on the receiving end does not make a contribution); alternatively, 20 individuals could receive $500 each, or ten persons $1,000. The permutations are endless… Figure 3 (Velez-Ibanez 2010:77)

Risks associated with fraud, non-payment or any other ‘act of God’ were mitigated by two factors. First, most participants were members of tight social networks, meaning that neighbours were likely also to be relatives or friends, to visit one another’s homes, to exchange useful information, and to attend the same local events or social activities. This in turn developed dense relations of trust. The second factor was the establishment of confianza—mutual trust based on kinship, friendship or other such relationships. In most of the 130 ROSCAs studied, informants raised the issue of risk, but only a few had actually suffered the consequences of someone defaulting or of the organiser absconding with the funds. Out of 130 ROSCAs with a total of 1,300 members (calculated on the assumption that ten is the normative size of a tanda), four defaults prior to 1983 and five after 1983 had resulted in a default rate of slightly more than 0.005 percent of the total funds (Velez-Ibanez 2010:111[7]).

Why would someone not just simply go to a bank to deposit their savings, collect interest and borrow money when the need arises? The reason is that participation in tandas is a social as much as a financial activity. There is no social glue enforcing weekly or monthly savings deposits in a bank. Tandas, by contrast, create an environment in which the social glue strengthens with every transaction. In particular, they help to alleviate the stress and uncertainty generated by dynamic migration processes.


  1. Ardener S. 1964 ‘The Comparative Study of Rotating Credit Associations,’ Journal of the Royal Anthropological Institute 94: 201–9
  2. Velez-Ibanez, C. 2010. An Impossible Living in a Transborder World: Culture, Confianza and Economy of Mexican-Origin Populations. Tucson: University of Arizona Press
  3. Velez-Ibanez, C. 1983. Bonds of Mutual Trust: The Culture Systems of Rotating Credit Associations Among Urban Mexicans and Chicanos. New Brunswick: Rutgers University Press
  4. Velez-Ibanez, C. 2010. An Impossible Living in a Transborder World: Culture, Confianza and Economy of Mexican-Origin Populations. Tucson: University of Arizona Press
  5. Velez-Ibanez, C. 2010. An Impossible Living in a Transborder World: Culture, Confianza and Economy of Mexican-Origin Populations. Tucson: University of Arizona Press
  6. Ardener S. 1995. ‘Women making money go round: ROSCAs revisited,’ in Ardener S. and Burman S. (eds) Money-go-rounds. Oxford and Washington: Berg: 1-20
  7. Velez-Ibanez, C. 2010. An Impossible Living in a Transborder World: Culture, Confianza and Economy of Mexican-Origin Populations. Tucson: University of Arizona Press