FRESNO, Calif. – David Medina, a 24-year-old from Fresno, was feeling the pressure of the holiday season last year. With Christmas approaching, he wanted to buy gifts for his family, but after checking his bank account, he realized he didn’t have enough money.
That’s when something he had been contributing his own money to all year made a huge difference.
Medina was part of a “tanda,” a community-based lending circle in which members contribute small amounts of money regularly and take turns receiving a lump-sum payout.
“And then I remembered, wait. I’m about to get my money from the tanda. That money can go straight into my Christmas shopping,” Medina said.
He had been paying $100 a month and received $1,000 just before the holidays. The timing helped turn a stressful situation into a manageable one.
“That money that I didn’t know I had put aside, I had it, and it worked perfectly,” he said.
With the extra cash, Medina was able to buy gifts: toys, new clothes, household items, and food. It helped his family enjoy a more comfortable Christmas.
A tanda is a traditional financial system widely used across Latin America that functions as a community-based savings-and-lending circle.
Participants contribute a set amount of money regularly and take turns receiving a lump-sum, similar to an interest-free savings plan or an informal loan. The system relies on trust among its members and has historically operated in cash.
Today, however, tandas are becoming more modernized, drawing interest from younger generations of Latinos in the Central Valley.
The Education and Leadership Foundation, based in Fresno, partnered with Mission Asset Fund, a Bay Area nonprofit, more than three years ago to expand access to these traditional lending circles. Both organizations use the model as a way to help communities build savings and access small, no-interest loans through structured, community-based programs.
Special Projects Manager at the ELF, Vianey Barraza, explains how tandas work.
“You get a group of people, usually between six and 10 individuals, and they decide to lend to each other. They decide on an amount, and usually every week or every two weeks, one person will get the full loan amount, and everybody will be paying in, including the person that receives it,” Barraza said.
Traditionally, participants knew each other; they used to have family members, neighbors, friends, and coworkers within the tanda. Trust is essential because a person is less likely to take the money and never return.
In the system operated by ELF, participants do not know each other.
And although this method of saving money is not widely heard of, it also is not totally new; in fact, it is a very old technique.
Raúl Hinojosa-Ojeda, a professor of Chicano studies at California State University, Los Angeles, says that the origins go back centuries.
“They’re not new,” Hinojosa-Ojeda said. “There’s multi-thousand year old roots of communal labor in Mexico, there’s 1000-year-old roots in Asia of communal work and communal savings and lending.”
How did they get to the Central Valley?
Hinojosa-Ojeda says that everything took shape in the 19th century, when immigrants from China and Mexico brought these collective savings practices to California.
Nowadays, as the immigrant diaspora continues to settle in the Central Valley, younger generations are using this old technique but giving it a technological update – with computers and cellphones. The organizations running the money-lending apps are able to guarantee the funding if a person drops out.
“The concept is very similar,” Hinojosa-Ojeda said. “People join, and then they agree to deposit money into a fund that’s controlled by a trusted body.”
Carmen Cardenas, community engagement coordinator at the ELF, helps people join the tandas, and sometimes she participates.
Her most recent tanda was handy when she celebrated her 24th birthday.
“When I received the loan, I wasn’t wanting to go into credit card debt for my birthday celebration, so I saved the money that I got from the lending circle to put it towards that,” Cardenas said. “I was able to use that money and then keep paying it back as the lending circle went on.”
She makes it a priority to participate in tandas whenever the opportunity arises, viewing them as an important way to manage her finances. She remains actively engaged throughout the process.
Through the MAF app, she is instantly alerted whenever a scheduled payment is processed, allowing her to track when money has been automatically withdrawn from her bank account.
Meanwhile, David Medina has found love for tandas – not just because he can save money along the way, but also because he’s actively building and strengthening his credit score through the MAF app, too.
“After college I didn’t really actually build my credit. The idea was pitching to me about if I was interested in a way kind of like building my credit score with this type of method,” Medina said.
After receiving his last payout, he signed up for another tanda and is set to collect $750 later this year — this time again with the ability to track and access his payments instantly from his devices.
For Raul Hinojosa-Ojeda, the professor from UCLA, that evolution is only the beginning.
He predicts that AI could also soon play a role in managing tandas.
“What’s interesting is that rather than reducing the use of this, is actually expanding it,” Hinojosa-Ojeda said.
