‘Informal’ Financial Practices in the South Bronx: Family, Compadres, and Acquaintances

This paper explores the role of ‘informal’ financial practices in shaping the resilience of immigrant urban communities, many of which are centered around families—nuclear, extended, and chosen. It looks at financial transactions and services, with particular attention to Rotating Credit and Savings Associations (ROSCAs), whose members are frequently related to each other through ties of kinship, especially in Hispanic circles. In a pioneering study documenting ROSCAs, they were defined as associations where members agree to make regular contributions of money to a fund that is given to each contributor in rotation. Because of their presence in various cultures and geographies, researchers from various disciplines have studied them, mostly in developing countries and immigrant communities within the United States. It is argued that such mechanisms substitute or complement formal financial services that do not fulfill their needs and play a key role in the infrastructures of immigrant communities to be resilient in the face of adverse circumstances. Findings from the present study’s fieldwork, conducted in one neighborhood in New York City’s South Bronx, show that these kinds of groups address the members’ short-term safety and resilience needs. However, given their low returns and unclear procedures to address wrongdoings, they entail higher risks for long term planning and social mobility. Nevertheless, given their persistent and organic nature across cultures and borders, they provide important insights to address those gaps and shed light on the contributions of family dynamics to the public domain.