A Qualitative Investigation of the Tanda: An Informal Financial Practice at the Intersection of Culture and Financial Management for Mexican American Families

Abstract

Lending circles, colloquially known as tandas, are an informal financial practice that exist among Mexican American communities in the United States. Tandas are an important strategy in families’ financial management strategies, yet the practice has gone largely unrecognized in the social sciences and financial management literatures. Contemporary and previous research on lending circle variations have fixated on the economic viability of the practice and have overlooked the fundamental component of the tanda: culture. A qualitative study was conducted to investigate lending circle participation for Mexican American individuals across the midwestern United States. This study aimed to develop a better understanding of the tanda, participants’ motivations to enter, the other financial management strategies employed by participants, and whether participants perceive any change in their family’s financial well-being. Twelve participants completed virtual semi-structured interviews. A qualitative methodological approach using Consensual Qualitative Research (CQR) was used to identify and understand the experiences of tanda participants. Findings revealed that participants’ motivations to participate in a tanda relate to financial accessibility and cultural preferences; participants utilize a range of complementary financial management strategies; and participants perceived the tanda to be conducive to their family’s financial goals and well-being, despite acknowledging the risks associated with tanda participation. Developing a better understanding of the interplay between culture and finances will give researchers and family educators insights on how to apply lessons from this time-honored practice to address the contemporary concerns of Mexican American families.