MEXICO CITY (CN) - Luis Regalado has worked as a handyman most of his life, after moving on from driving taxis when he was younger. He owns a small hardware store in the Santa Maria la Ribera neighborhood of Mexico City.

His name has spread through word of mouth in neighborhoods as a dependable person for odd jobs, including boiler and drywall installation, electrical fixes, waterproofing roofs for the rainy season and kitchen restoration.

Regalado says he makes a decent living, although it may be somewhat unpredictable due to the independent nature of his work. He generally works alone or with an assistant, with whom he shares the job's pay in cash.

Over the last 25 years, Regalado has periodically participated in a tanda or informal community lending circle, usually among neighbors or acquaintances, and sees it as a practical way to save money and receive larger sums at once, which may otherwise be impossible.

"I can get money to spend on vacations or school supplies for my teenage son, or in case of emergencies," Regalado said in an interview in front of his hardware store.

He participates in a tanda with 19 others, each of whom contributes 1,000 pesos to a collective fund. Each member takes a number corresponding to a predetermined week in which they will receive a lump sum from the collective funds. Members may also acquire more numbers by contributing an extra 1,000 pesos per number.

"For example, you contribute 19,000 pesos over 20 weeks, and that's the amount you receive when your number comes up. You can also buy more numbers. Each number costs 1,000 pesos, but you only receive what you give," explained Regalado.

Getting more numbers means that you will receive the money more times, but the amount of money you receive when it's your week remains the same.

Alternative banking

Because Regalado earns his money in cash, he can bypass the banking system, which may charge fees and interest on a savings account.

"You don't need a bank account, because otherwise the bank might charge you a fee for managing your account. Here, almost all the money is handled in cash. You receive, you give. In my case, I give my 1,000 pesos, and there comes a point where everyone does the same. All 19 participants do the same, and then it starts back up again," Regalado said.

Regalado explained that most of the responsibility falls on the organizer of the tanda. If someone leaves and doesn't want to pay anymore, the organizer must still hand over the money to the participants.

"Maria Isabel, the organizer of my tanda, looks for people who are trustworthy. She's not going around the streets looking for strangers to join a tanda. I have to trust the organizer; that's the most important part. I don't know everyone personally in my tanda, but I trust and know the organizer," he said.

He's been in this particular tanda for two years, and the worst thing that has happened is that sometimes people are late on their payments, so he can't receive the full amount owed to him at once.

Due to the neighborly nature of the group, there's no aggression, but Regalado says it is upheld by "moral pressure."

"If you don't pay your part of the tanda, they may look down on you. That makes you feel a bit insecure. It hurts, and you worry that maybe they won't invite you next time, and at the same time, you create for yourself a bad reputation among tandas, which could hurt you in the future," Regalado said.

Emmanuel Balderas, a chef and small restaurant owner also in Santa Maria la Ribera, has been in a tanda in one form or another off and on for 19 years. He first entered a tanda when he was 18, when his mom was in charge of one.

"Instead of putting my money in the bank, I joined a tanda. I put in 500 pesos every week," Balderas said. Though he views it as a positive way to save money for fees and restaurant maintenance, it hasn't always been perfect.

He said there were multiple times where people would take their numbers and their money and then depart, leaving his mom compelled to cover the costs.

Despite this, Balderas is currently a participant in two tandas, both organized by women.

"I only have known women to organize the tandas. They're more responsible, they know how to handle money, and they have a straight face about things. They don't mess around," Balderas said. "Without trust, you'll lose your money."

Balderas likens a tanda to a savings bank for workers - a certain amount of money that is deducted from your salary and given back to you at the end of the year - something he used to join when he worked in restaurants.

"Let's say in January, they start taking 200 pesos from your salary. Then they give back at the end of the year the amount that added up," Balderas said.

Balderas also said that tandas can be used for objects instead of money.

"You get 20 people to join a tanda, that's 20,000 pesos. You can buy a motorcycle, and then instead of receiving money when your number is up, someone gets the motorcycle," Balderas said.

Economic and social sense

Balderas estimated most people working within Mexico's cash-based informal economy participate in tandas - a group that accounts for more than half of the working population, according to the National Institute of Statistics and Geography.

Regalado agreed, adding that tandas are extremely adaptable and don't cater exclusively to Mexico's informal economy.

"I've seen tandas that give out money daily, or if you're an office worker - because they receive their checks bi-monthly - every two weeks. It all just depends," he said.

Regalado's number came up Dec. 19 during the Christmas season, a particularly advantageous time to receive the pot.

"The organizer has all the power in deciding when everyone gets their number. You can make a case for yourself explaining why and when you need the money from the tanda, but it comes down to the organizer. Sometimes the longer you've been in a tanda, the more sway you can have within it," Regalado said. "Maria Isabel has almost all the power over how this whole thing works and when you get your money."

Miguel Angel Quinones, a finance researcher and Ph.D. candidate in Family Social Science at the University of Minnesota Twin Cities, said tandas function for a twofold reason: economic mobility and social value.

"For families who don't have access to traditional financial institutions or maybe are facing different forms of exclusion, real or imagined, tandas are very valuable. There is a case to be made for tandas as a form for families to bypass those barriers to access those financial needs on their own terms. And in doing so, it helps put you on the path to develop your own financial foundations and help you move forward," Angel Quinones said in a phone interview.

"Tandas also have social value in that it helps sustain people's relationships to one another. By doing this financial practice of pooling the money you're helping sustain these relationships with other people. In Mexico, especially, where you have to go from one house to the other to collect the money. And that may be a really important way for people to sustain their social relationships," he said.

He also mentioned the role of social pressure in a tanda.

"In a tanda, I need to commit to this payment once a month or every two weeks, whenever it is, because these people are counting on me. And so those social bonds and that looming understanding that if I don't do this, people are going to be upset with me, is a big motivator," he said.

Angel Quinones said that financial relations outside traditional financial institutions are nothing new.

"When you look at it through a lens of anthropology - of the study of people - people have been using money in a very interpersonal and relational way forever. And so I think the fact that it happens in Mexico and continues to happen in Mexico just kind of speaks to this connection that people have with the community," he said.

Tania Bello Rodriguez, a waitress, gives a bi-monthly amount of 500 pesos to her tanda in the Ecatepec borough of Mexico City. She said there is a reason women generally organize tandas.

"They're better at organizing and saving their money than men," Bello said in an interview at a restaurant in December. "I don't want to generalize every man of course, but what are they spending their money on, alcohol? Women are more meticulous. More detailed. More organized."

Bello Rodriguez also reflected on a lack of savings culture in Mexico - specifically for women - necessitating the use of tandas.

"There's no culture of saving today. If in Mexico they taught women money-saving classes from a young age, I want to believe we'd be in a different boat. The vast majority of tanda organizers are women, I believe, because they're just left behind," she said. "The way society and politics are going on, we're not going to get anywhere. So what do we do? We make tandas by pooling our resources to grow and achieve what we want. Because politically, man, they're not supporting us, we can't make it happen.

"I want to organize a tanda because I want to grow, because a man isn't going to help me grow," Bello Rodriguez said.

Source: Courthouse News Service