The Tanda: An Informal Financial Practice at the Intersection of Culture and Financial Management for Mexican American Families

Abstract

Tandas, the Mexican variation of lending circles, are an informal financial practice used among Mexican American communities. Tandas are an important asset in families’ resource management strategies, yet the practice is largely unrecognized in the resource management literature and devalued by traditional financial institutions. A qualitative study was conducted to investigate tanda participation of twelve Mexican American individuals across the midwestern United States. This study aimed to develop a better understanding of participants’ motivations to enter, the other financial management strategies employed by participants, and the tanda’s significance to family resource management. Findings revealed that participants’ motivations to participate in a tanda relate to financial accessibility and cultural preferences; participants utilize a range of complementary financial management strategies concurrently with the tanda; and participants perceived the tanda as conducive to their family’s financial goals and well-being, despite acknowledging the risks associated with participation. Developing a better understanding of the tanda provides insights into the ways culture serves as a conduit through which family and individual goals are realized, financial capability is bolstered, and uncertainty wrought by economic and political contexts is reduced.

Financial Interdependence: A Social Perspective

“…There are also more strength-based examples of culturally practiced FI, such as savings groups. Known by many different names and having various designs and levels of formality, these savings clubs-such as the Mexican "tanda" [33], the West African and Caribbean "susu" (sou-sou) [34], the Turkish "altın günü" [35], or the Chinese "hui" [36], or the more formal group micro-finance organization, such as the Grameen Bank [14] and other similar ROSCAs (Rotating Savings and Credit Associations) [5]-rely upon the strength of interpersonal relationships to engage in savings and loan activity. Typically, each member of a savings group will regularly contribute an amount, and each, in turn, will then receive their share of the collected money.…”

“…They invest large sums into their own business or save money to prepare for a hardship expense, and the social aspect of these savings groups fosters a spirit of encouragement, mutual aid, and trust, as well as fellowship and socializing. As these arrangements are often rooted in traditionally collectivist cultures, they are frequently also perpetuated within immigrant enclaves [6,33,37].…”