cundinas

Cundinas are informal savings groups common in Latin America and in Latino communities elsewhere. They operate as rotating savings and credit associations in which members contribute an equal amount at regular intervals. In each period, the total pot is given to one member, and the process continues until every participant has received once.

A cycle lasts as many intervals as there are members. The order of payout may be determined in advance, by drawing names, or by a fixed rotation. The pot size equals the contribution multiplied by the number of participants. Payouts are typically lump sums rather than ongoing payments, and there is usually no interest charged among members.

The arrangement is known by various names that vary by country and community. In many contexts it is called a tanda or cundina, among other regional terms. While the core mechanism is similar, rules, reporting, and governance can differ, reflecting local customs and social expectations.

Uses and social role: cundinas are used as a practical savings tool, to fund large purchases, cover emergencies, or provide liquidity for members who have irregular income. They rely on trust and social ties, and they often function as a supplementary financial strategy in communities with limited access to formal banking.

Risks and considerations: because cundinas are informal, they typically lack formal legal protections. Risks include defaults, delays, or mismanagement. Groups mitigate these risks with written agreements, a designated facilitator, clear payout rules, and, in some cases, digital platforms that offer record-keeping and governance features.