Tandas

Tandas are informal rotating savings groups common in Mexico, Central America, parts of the Caribbean, and among Latin American communities in the United States. They function as a form of rotating savings and credit association (ROSCA). Members contribute a fixed amount at regular intervals, typically weekly or monthly. The pooled money is then allocated to one member in a prearranged order, which can be determined by lottery, a fixed sequence, or rotating leadership, until every participant has received the lump sum. After the final payout, the cycle may restart with a new round.

Tandas are usually organized by a trusted member or small committee who collects contributions, tracks payments, and verifies eligibility. The arrangement is informal and typically lacks formal contracts or financial protections. The main purpose is to provide quick access to a large amount of money for major purchases, emergencies, or investments without relying on banks or formal lenders. Participants also gain discipline in saving and can strengthen social ties, but there is no interest earned on contributions, and a small fee may be charged to cover administration.

Risks include defaults, mismanagement, disputes over payouts, and potential losses if a member stops contributing. Because tandas are informal, they offer little legal recourse in case of problems. In recent years, some digital platforms and apps have replicated ROSCA structures to improve tracking and participation, while still carrying similar trust-based risks. Tandas are sometimes known by regional names such as cundinas, reflecting local variations in practice.