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A savings account system used around the world in impoverished countries is becoming popular among migrants in New Bedford.
Those without traditional access to banks are saving money as a group and “lending” the proceeds to rotating members, who use the payout for big expenses like cars, down payments or unexpected expenses.
Known in Central America as “La cundina” or “Los cuchubales,” the system is helping a group of 40 migrants in New Bedford with their needs. In their case, each member agrees to save $100 a week for 20 weeks, bringing the total amount collected every week to $4,000. Every week, two different designated members receive that money, $2,000 each, interest free.
“(La cundina) helped me buy a vehicle, to make the down payment on my house,” said Estela de la Cruz, a Guatemalan woman who, in addition to participating in several groups, also coordinates and helps collect the money that savers deliver each week.
“This system is the basis for community development because they trust each other and strengthen relationships among community members,” said Corinn Williams, executive director of the Community Economic Development Center in the city.
“This system is much larger, more agile, and reaches the poor with fewer complications,” said Jeffrey Ashe, an economist at Columbia University who has been researching microfinance and forming savings groups for 40 years.
Email Gerardo Beltrán Salinas at [email protected]
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