Friday, May 29, 2009

Survival Tool for Immigrants in a Recession -- La Cudina

Poverty and hard times have always been a fertile time for innovation among immigrants, especially during hard times. The burial and benevolences of the 19th century occasionally evolved into banks, credit unions and insurance companies in the 29th century. The poor are not totally helpless in providing for their needs, as the success of mini-credit groups like the Grameen Bank attest. Mexicans have long had their own vehicle of self-help -- in good times perhaps to open a small business and in hard merely to survive and pay pressing bills. The idea behind the "cudina" is to help oneanther by pooling a small amount of money -- usually on average about $1,000 --
amon a few friends and family as a rotating credit. Each member pays in a small amount, takes a sum out -- often by turns -- to meet a pressing need and pays back when he/she can. It's founded on trust and so restricted to family and close friends. Often it's a family secret. Cudinas are not without dangers -- for example, members pulling out, not keeping up with contributions or repayments, or simply fraud. However small the amounts are in terms of the larger economy, they are big to the participants and work for them. Cudinas are widespread in Mexico and came into the US in the Southwest. Not everyone trusts them and many think they are risky. Stll, as the recession brings on more unemployment or reduced income, Mexican immigrants are turning to them around the country. (See Arizona Republic article.)

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