MAF launches innovative Cestas Populares

Social Compact found that 44% of all families in the Mission District have no credit histories. Without credit, Mission families are locked out of the credit market all together, forced to turn to high-cost, predatory lenders for their financial needs.

In collaboration with One California Bank, MAF is launching Cestas Populares, an innovative program that will help participants create or improve their mainstream credit score by valuing what is happening in and among immigrant communities. Immigrant communities have a rich tradition of participating in small, informal lending circles. Throughout Latin America, such lending circles are known by many different names, including Cestas or Tandas or Sans. No matter what the name, the activity is the same. Individuals in small groups –bonded by trust– pull their resources together by each contributing a set amount of money to a pool that is then lent to one of its members. This happens until everyone in the group gets a turn at receiving the money. Cestas Populares will in effect formalize this activity by capturing and reporting it to credit agencies as bona fide financial activity.

Cestas Populares will create or improve participants credit scores that will in turn open the doors to low-cost credit and financial services.