Word: consorcio
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Dates: during 1960-1969
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...consorcio lottery method for financing cars [July 21] may be "typical of Brazilian ingenuity and flair," but its origins are in the Old World. Although such rotating credit associations are known widely in Asia, Africa, and now in Latin America and the West Indies, the most likely source of the Brazilians' consorcio is the esusu of the Yoruba of Nigeria. Whether it was originally introduced to the New World by Africans, Chinese or East Indians, this popular method of saving is now known as boxi money in Guyana, meeting in Barbados, partners in Jamaica, esu in the Bahamas...
Spinning the Basket. The way a typical consorcio works: 80 or so would-be buyers get together, pool enough money each month to buy two cars. The group gathers at an auto showroom, where some lucky member gets one of the cars by the spin of a bingo-style basket. For him, the effect is much the same as if he had made an installment plan purchase: he takes possession of the car right away, goes on making payments into the consorcio each month thereafter...
...been, will probably wind up with a car sooner than if he had merely put aside the same amount of money every month on his own. Reason: the extra cash accumulated in each auction, coming on top of the members' regular monthly payments, enables the consorcio to buy-and distribute by lottery-a third, or maybe even a fourth new car every couple of months...
Safe & Lucky. In short, the consorcio is a kind of collective buy-now, pay-later plan by which credit-wary Brazilians can be sure of getting a car-though they can never know exactly how soon-without making huge down payments or interest charges. Actually, the technique was devised in the early 1950s by enterprising tailors who had been having trouble selling clothes. Before long, freelance car-buying consorcios sprang up, but these were often marked by fraud...
Today, auto dealers themselves are sponsoring consorcios, and even manufacturers are getting into the act. Months ago, Max Pearce, General Managing Director of Willys-Overland do Brazil, began to notice the spectacular successes some local dealers were having with consorcios, wondered if the scheme might not be worth trying on a nationwide basis. Last month the company kicked off a consorcio campaign expected to generate communal purchases of 2,500 cars a month by 1969. Skeptical at first, João Lopes Coelho, director of a dealer-run lottery operation in Rio de Janeiro, lauds the whole idea as "typical...