What a natillera is and how it works.

How it works, paso a paso

1. The rules are agreed: installment amount, payment date, loan rate, late-payment fine and payout date.
2. Every month, each member pays their installment into the common fund.
3. Whoever needs money asks the fund for a loan and pays it back with interest, in the installments the group agreed.
4. Interest and the group’s other income (fines, bingos, raffles) are added to the fund.
5. At the end of the cycle, expenses and outstanding loans are deducted, and the fund is shared among the members according to the agreed rule.

Where the earnings come from

A natillera’s profit almost always comes from the interest on loans among members, and sometimes from fines and events the group organizes. The more money is lent and the longer it stays lent, the more interest is generated.

Each group decides how to share it. The most common approach is to split the interest in proportion to what each person had saved during the cycle, so whoever saved more, and for longer, receives more. What matters is that the rule is written down before you start.

What the risks are

• It depends on trust: if a member does not repay a loan, the group absorbs the loss.
• Without clear records, disputes appear: who paid, how much they owe and how much they are due.
• The money is usually in one person’s account, normally the treasurer’s.
• It is not a financial institution: it has no deposit insurance and none of the supervision that banks or cooperatives have.

Best practices

• Write down the rules and have everyone accept them before the first installment.
• Record every payment with its date, amount and a receipt.
• Set a limit on loans, per person and on the fund’s total.
• Charging an interest rate that does not exceed the current usury rate.
• Sending each member a periodic account statement.
• Review the accounts together before the payout.

How NatIA Ahorro helps

NatIA Ahorro is software for natilleras (Colombian savings circles): it records installments, loans with their interest and the closing distribution in exact cents, and gives each member an account statement. It does not receive or hold the money: contributions keep going to the group’s account.