Also known as cundinas, sans or quinelas, tandas are informal borrowing and lending circles that provide an alternative to a traditional savings account and a loan from a financial institution. Quite simply, tandas allow for a short-term, no-interest loan and savings account among friends and family.
Growing up in California and Iowa, my parents participated in tandas with their friends, co-workers and neighbors. Before they established accounts at financial institutions (and even a few times after), my parents turned to tandas to save and borrow money outside of the financial mainstream.
Tandas typically work in the same fashion — a group of people already acquainted with one another collect money to help each other financially. A leader, whom is acquainted with tandas, gets the group together and is responsible for collecting, holding and distributing the money. The leader usually sets the rules aimed at benefiting the entire group, including the amount of money collected, when the money will be collected and the number of people in the group. Once these parameters are established, the leader randomly chooses the order of whom is going to receive the money. Most often, tandas distribute money through a raffle or make the decision based on the individual(s) believed to need the money most.
Here’s an example of how a traditional tanda could work: The tanda is formed with 10 friends and family. Each member contributes $100 every two weeks to the group leader. At the end of the month, one participant gets the “pot” of $2,000. This process continues until each member has received the pot.
The tanda played a very important role in my family life. Each time that my parents borrowed from the tanda, the money was earmarked for specific expenses, such as furniture for our first house, immigration expenses as we were going through the process of adjusting our status in the U.S. or trips to Mexico to visit family.
I remember taking turns going with either my mother or my father to the tanda group leader’s house when we moved to Iowa. She was a neighbor — someone everyone in the Latino community knew and trusted. The tanda leader was also an entrepreneur. She sold jewelry and home interior products to the community, which my parents also bought from her. My parents would give her their $100 payment in cash, usually after my father got his paycheck cashed from work. The tanda leader would then store the cash in a little cash box in her office desk and would note my parent’s payment in a notebook.
I also witnessed my parents pulling a number from a box, letting them know when it would be their turn to receive the lump sum from the tanda.
When I was a teenager, my parents began to entrust me with delivering the $100 payments. As the oldest child in my family, this was a big responsibility but seemed very simple to do. Throughout my childhood, I did not realize that there was an alternative to saving and borrowing money at a traditional financial institution because I was used to seeing my parents cash their checks, borrow and save completely outside of the financial mainstream.
Tandas were convenient, they involved people that we knew and trusted, and they helped my family out financially when we needed it.
Although very small in nature, tandas are making big headlines. NPR’s Changing Lives of Women series and Code Switch have each covered the topic in recent months. The article, Lending Circles Help Latinas Pay Bills and Invest, is one example. Modern tandas are aiming to bridge a cultural custom with the credit union experience.
To leverage the benefits and emotional, cultural and community connections of the tanda on a larger scale, Coopera worked with Travis Credit Union (TCU) based in Vacaville, Calif. through a grant from the National Credit Union Foundation, to create the modern version of a tandas — the New Era Tanda Program. This program was specifically designed to bring the concept of the tanda to the credit union, where people helping people is the organization’s primary mission.
In addition to supporting Latino families save and borrow, the program helps individuals open accounts, build a credit history and receive financial education.
Participants in the program contribute on a monthly basis to a shared savings account and also receive a group share-secured loan to help save for a down-payment on a vehicle. After satisfactory completion of the program, each participant is eligible for a TCU credit-building credit card and/or auto loan. The program uses a grassroots and culturally relevant approach tailored to the local Latino community.
TCU’s program is just one example of how tandas can work in the mainstream financial system. Through modern tandas, credit unions of any size and in any location can realize tremendous opportunity to engage with the Latino community, as well as to bridge cultural traditions and customs with good financial alternatives.Leave a comment
Coopera client Travis Credit Union (TCU), the Yolo Family Resource Center (FRC) and Woodland, Calif., city officials recently honored the first class of graduates from the credit union’s New Era Tanda Program. Debuted in mid-2012, the program was designed to help Latino participants develop a 12-month shared savings goal and to take advantage of the credit union’s unique savings and loan offerings.
TCU worked with Coopera to develop the program concept for this unique program centered on tandas (also known as cundinas, sans or quinelas). Informal borrowing/lending circles, tandas are common in immigrant cultures, especially Latin American immigrant cultures. The modernized tanda, developed by TCU, aimed at bridging a cultural custom with the credit union experience.
Funded in part by a National Credit Union Foundation grant, TCU partnered with the Yolo FRC to conduct the pilot program. The program used a grassroots and culturally relevant approach tailored to the local Latino community. The first New Era Tanda Program class was composed of six people, each of whom was encouraged to attend monthly financial literacy courses, all offered in Spanish.
Participants contributed on a monthly basis to a shared savings account and also received a group share-secured loan to help save for a down-payment on a vehicle. In addition, after satisfactory completion of the program, each participant was eligible for a TCU credit-building credit card and/or auto loan. Throughout the program, participants and their families were encouraged to discuss how the various financial educational topics and the act of habitual saving affected their financial well-being.
“The grant’s goal was to study, test and implement a savings and lending program that leverages a Latin American cultural tradition, the tanda,” stated Barry Nelson, executive vice
After graduating from the program in August, participants became eligible for TCU’s individual product offerings to meet their credit-building and/or vehicle-purchase goals.
As with any good pilot, measuring the results was incredibly important to TCU, NCUF and Coopera. TCU worked with Coopera to create pre- and post-surveys to measure and track the change in each participant’s financial beliefs and behaviors. These surveys were administered at the start and end of the program. One of the goals of the program was to build Hispanic members’ credit and good financial habits through financial education. The findings were exciting.
Congratulations to TCU, Yolo FRC and the New Era Tanda program participants on a job well done!
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What follows is a case study excerpt from the Hispanic Opportunity Report developed as part of the California and Nevada Credit Union Leagues’ newly formed partnership with Coopera.
In 2005, Patsy Van Ouwerkerk, president and CEO of Travis Credit Union, headquartered in Vacaville, Calif., and the credit union’s Board of Directors and senior management team recognized many Hispanics in their local communities were underserved and were thirsty for dignified, affordable financial services.
Nearly 40 percent of California’s residents identify themselves as Hispanic, and that number is predicted to continue climbing at a rapid rate.
“At the time, we identified an advantage our credit union had over other area financial institutions,” said Travis Credit Union Director of Corporate Relations Shérry Cordonnier. “Whereas other providers were looking to prey on underserved individuals, we truly wanted to partner with them. We also knew there was only a small window of opportunity to build and capture loyalty with potential Hispanic members. As such, we implemented several programs to strengthen our efforts to attract and retain Hispanic members.”
Many of these programs, Cordonnier added, continue today.
Travis CU began its initial Hispanic outreach that year by partnering with Filene Research Institute to better understand the size and needs of the local Hispanic market. With this background information, they began to formulate strategies and initiatives for better targeting members in their communities. Realizing their initial activities were working and overall membership was increasing, the cooperative decided it was time to take its efforts to the next level — the development of a comprehensive, strategic plan that would be sustainable for the long term.
“We had already set our strategic direction when I was introduced to Warren [Morrow, late CEO of Coopera] who was speaking at a conference about how Coopera was helping credit unions with their Hispanic outreach efforts,” said Cordonnier. “Not many financial institutions were doing this type of outreach at that time, so we needed a partner that could help us pioneer new activities and help us be true innovators. After talking more with Coopera, we knew they would be able to help us get to that level.”
To kick-off a partnership with Coopera, Van Ouwerkerk invited Morrow to participate in the credit union’s Board spring planning session in 2009. The credit union initially utilized the firm’s consulting services to develop strategies for becoming more visible to potential Hispanic members in the communities they serve. At Coopera’s recommendation, the Travis CU team implemented the Hispanic Opportunity Navigator (HON) to get a snapshot of how effective they had already been in serving the Hispanic community and to identify what opportunities may be in the future.
The credit union also worked hard to bolster its grassroots marketing efforts, said Cordonnier. Some of those initiatives include:
Since initiating these programs, Travis CU, serving members out of 22 locations in Northern California, has realized 5-percent membership growth year-over-year, and now counts Hispanic members as 20 percent of its overall membership.
To further evolve its outreach efforts, Travis CU initiated two new programs to position the credit union as a trusted financial advisor in the Hispanic market.
The first program, New Era Tanda, debuted in 2012. It is designed around Hispanic tandas (also known as cundinas, sans or quinelas). Informal borrowing/lending circles, tandas are common to Latin American cultures. The modernized tanda, developed by Travis CU, is aimed at bridging a cultural custom with the credit union experience.
Funded by a National Credit Union Foundation grant, Travis CU is piloting the New Era Tanda program with two groups in Solano and Yolo counties. Each group is composed of six people and helps participants develop a 12-month shared savings goal and to take advantage of the credit union’s unique savings and loan offerings. The program offers monthly meetings with financial literacy courses offered in Spanish.
After graduating from the program, New Era Tanda participants are then eligible for individual product offerings to meet their credit-building and/or vehicle-purchase goals. Due to the anticipated success of the pilots, Cordonnier said Travis CU might consider making the New Era Tanda a permanent program available in the credit union’s 22 branch locations in the future.
Travis CU also launched an immersion program in 2012, aimed at bolstering the credit union’s current employee training efforts. The goal of the immersion program is to illuminate the immigrant experience for Travis CU employees, making them more sensitive to Hispanic members’ needs and challenges.
During a series of cultural immersion sessions nearly 140 Travis CU employees took their training from the classroom to the real world. Visiting Mi Pueblo Food Center in Vallejo, Calif., and El Tejaban restaurant in Vacaville, employees at both businesses were instructed to speak only in Spanish to Travis CU employees, allowing them a first-hand experience with the challenges of being understood as a foreign–language citizen.
“The exercise placed Travis employees in the same situation as our Spanish-only speaking members, demonstrating to them what it might be like for those members when they visit the credit union,” said Cordonnier. “In return, our employees gained a new empathy for many of our Hispanic members and what they experience every day. The training focused on treating these members with respect and dignity, reading body language and the importance of understanding and communicating the credit union’s products and services in both English and Spanish.”
According to Cordonnier, the training helped provide Travis CU employees a better understanding of the credit union’s current outreach efforts and the need for additional trainings in the future. In addition, the training helped employees overcome concerns, fears and anxiety related to serving members not like themselves. As a result of the program, Cordonnier and the senior management team at Travis CU have noticed the employees are more accepting of the credit union’s Hispanic outreach efforts and have taken steps to share their experiences with others. They regularly initiate more efforts, including asking Travis CU to provide financial vocabulary lists in Spanish, more training, bilingual staffing, additional marketing and more involvement in Hispanic events.
Also, noted Cordonnier, employees have become more active in local community organizations. An an example, Eric Maldonado, Travis CU’s community involvement officer for Contra Costa County, is currently serving a term as President of the Contra Costa County Hispanic Chamber of Commerce, which has been recognized as the 2012 Hispanic Chamber of Commerce of the Year in California.
“By gaining a better understanding of our Hispanic members,” continued Cordonnier, “Travis employees now help our leadership team develop better strategies to increase membership, grow revenue and boost loan volume with this important demographic.”
Another by-product of the immersion program has been the building of trust with local Hispanic merchants in the communities Travis CU serves. The programs have been well-received by these businesses, as many have brought the merchants new customers and revenue growth opportunities, as well as opened the door for new partnerships in future outreach efforts.
In recognition of their outstanding community outreach efforts, Travis CU was named the Community Leader of the Year by the Solano County Hispanic Chamber of Commerce in October, 2012. “This award is usually given to an individual,” said Cordonnier. “It is an honor to be the first business to ever receive it.”
Because of its successful investment in the local Hispanic community, Travis CU plans to implement more immersion training sessions in the future to make sure all employees have the opportunity to participate. They also hope to add more bilingual staff and offer more products and services targeted to their Hispanic members’ needs.
“As we continue to enhance our Hispanic outreach programs to build awareness for our credit union within the communities we serve, we know that the investment we’re making has not only been good for the strategic growth of the credit union,” concluded Cordonnier, “but has also proved to be important to the overall credit union movement. We have seen first-hand that our mission of ‘people helping people’ is truly the right approach to take as we work to build trust with, and provide much-needed services to, this growing market.”Leave a comment
Commissioned by the California and Nevada Credit Union Leagues, a new report from Coopera highlights opportunities for credit unions in California and Nevada to grow their membership and increase their revenue through service to local Hispanic populations.
Coopera’s Hispanic Opportunity Report will be available to California and Nevada Credit Union League Applied Research Institute members first, and then it will be available to the general public following these webinars:
As the influence and impact of Hispanic consumers continues to grow in the U.S., the Coopera Hispanic Opportunity Report discusses what serving Hispanics means for California and Nevada; which credit unions are best positioned to serve the Hispanic community; and characteristics of the local communities that must be considered to successfully serve Hispanic residents.
According to the report, local credit unions’ biggest growth opportunity right now is Hispanics.
In California, the report uncovers:
For the report, the Coopera team calculated if 10 percent of California’s Hispanic adults were members of a credit union, they would contribute an estimated $2.1 billion in loan balances and $592 million to annual income.
In Nevada, the report reveals:
A similar calculation done for Nevada, based on an assumption of 10 percent of the Hispanic community joining a credit union, found Nevada’s Hispanic adults would contribute an estimated $82 million in loan balances and $28 million to annual income.
The Hispanic Opportunity Report also debunks common myths businesses have about the Hispanic community and shares case studies of credit unions with successful Hispanic outreach efforts, including:
For more information about this report, contact Coopera at: http://www.cooperaconsulting.com/contact-us.cfmLeave a comment
In case you haven’t heard, during recent cultural immersion sessions facilitated by Travis trainers, about 140 Travis Credit Union employees took a series of trips to Mi Pueblo Food Center and El Tejaban restaurant in Vacaville. During these trips, employees at both businesses were instructed to speak only in Spanish, so Travis employees could get a first-hand experience in the challenges of trying to be understood in a foreign language.
This exercise was designed by Coopera and adapted for the credit union by Travis’s training staff to put Travis employees in the same situation as their Spanish-only speaking members might experience when visiting the credit union. By gaining a better understanding of their Hispanic members, Travis employees will now be able to help their leadership team develop better strategies to increase membership, grow revenue and boost loan volume with this important demographic.
For more information on how Coopera can help your credit union put together an employee cultural immersion program, contact us today.Leave a comment
Among the excellent presentations at the 7th Latino Credit Union Conference this June was a panel discussion of best practices for Hispanic outreach.
Two of Coopera’s clients, Greater Iowa Community Credit Union and Travis Credit Union shared insight with the audience. Greater Iowa’s story, as told by Michael Adams, even made CUNA’s News Now online publication.
Michael shared specifically how Greater Iowa expanded its footprint from a university credit union to a community-based institution that has rolled out the welcome mat for members of the local Hispanic community. Some of the tactics Michael talked about included: taking a multi-pronged approach to marketing, hiring bilingual and bicultural staff, forming an employee implementation team and offering a Spanish-language personal finance website.
To read more about Greater Iowa’s experience, visit CUNA’s News Now.Leave a comment