What is a tanda?

What is a tanda in English?

There’s no everyday English word for it. People say savings circle, money circle or lending circle. The formal name is a rotating savings and credit association, or ROSCA, which is what the anthropologist Carlos Vélez-Ibáñez calls it in his work on tandas. Barb Mayo, interviewed by NPR, put it more simply: “it’s like a no-interest loan with your friends.”

Tanda or cundina?

Both words mean the same thing. NPR reports that which one you use depends on where your family comes from in Mexico. You’ll hear both in the US, and everything here applies to both.

How a tanda works

1. The organiser gathers a group and everyone agrees the amount and how often they pay.
2. The group settles the order of turns.
3. Everyone pays the organiser each time a payment is due.
4. The person whose turn it is takes the whole pot.
5. It carries on until everyone has had the pot once.

Here’s the example NPR gives. Ten women each give $100 every two weeks to the organiser, and at the end of each month one of them takes $2,000. It runs for ten months. Everyone pays in $2,000 and everyone gets $2,000 back.

Nobody earns interest. The first person to take the pot has borrowed from the group for free, and the last has saved. Mayo told NPR she used her first payout for expensive dental work.

Who goes first?

Most groups agree the order up front or draw it. Economist Stefan Klonner describes two main ways savings circles around the world do it: by lottery, or by auction, where members bid for an early turn. If you draw it, our free rota and pot calculator picks a fair order and lists every date.

Why people trust a tanda

A tanda works because everyone knows each other. Vélez-Ibáñez told NPR that in a tanda, everybody already knows whether you’re trustworthy. For Mayo, missing a payment would have meant letting down her friends, which she said was worse than a default notice from a bank.

What can go wrong

• Someone takes the pot early and never pays again.
• The organiser leaves with the money.

NPR says both happen, though Vélez-Ibáñez calls it rare. Be more careful with groups of strangers online, especially ones that promise you’ll get back more than you pay. The Federal Trade Commission warns about social media “games” such as Blessing Loom and Money Board that ask for $100 and need you to recruit others. It calls them a type of pyramid scheme. A real tanda pays back exactly what each person put in.

This guide is general information and isn’t legal or financial advice.

Same idea, other names

Caribbean families call it a susu or a pardner, and Nigerians call it ajo. See our list of savings circle names around the world.

Where CircleSave fits

CircleSave keeps the record for your tanda, and you can set the amount in US dollars. Everyone can see who has paid and whose turn is next, and members get reminders on WhatsApp. We never hold the money, because members pay whoever’s turn it is directly. We can’t promise everyone will pay. A circle can have up to 10 people.