Monday, June 1, 2009

Cundinas


I have heard of tongs, alliances of Chinese business people who extend credit to each other, but now I learn that Mexicans here have type of group savings plan called cundinas.

These are groups of 10 or so family members, friends or colleagues who contribute a set amount of money each week, say $100 for 10 weeks. Each week, one member gets $1000.

Experts say be careful, though—these can be based on scams.

They work best when the people know and trust each other and no new people are added unbtil everyone has gotten their sum.

The word comes from “cundir,” which means “to spread.” They are also called tandas.

These arrangements are funded in all social classes in Mexico and used to fund businesses and so on, but here are mostly formed among immigrants.

Be sure you know the level of risk if people back out. But if they don’t, the money is interest free.

Am I missing something here…If you put in $100 a week for 10 weeks, wouldn’t you have had your own $1000?

1 comment:

vixenscarslulu said...

duh. Its a way to absolutely save money. If you take the last position you are pretty much saving the $1000 for a planned event. But if you are in dire need and no one extends credit to you at a bank or other institution, this is the only way to go. You would take one of the first numbers and then pay back the loan. The people who need it the most take the first numbers.