Infrabanking: Mobilizing capital in communist Cuba

Abstract

In 2011, the Cuban government authorized banks to start offering loan credit to the country's growing number of small businesses for the first time since the beginning of the revolution. Yet in the following years, citizens have largely circumvented these services. This article draws on twenty months of fieldwork among market traders in Havana to examine why so few Cubans rely on the formal banking system to secure capital. It analyzes alternative methods people employ to organize their financial futures, by leveraging kinship ties, partnerships, friendships, property, and loan sharks, and by participating in rotating savings and credit associations. To understand the advantages these approaches offer to mobilize capital, it is crucial to grasp how people navigate their economic lives in ways that are influenced but not dictated by short-term considerations of net profit. Nonmonetary concerns about access, time frame, and visibility lead people to raise and store wealth outside the formal banking system, constituting a domain I call infrabanking: banking practices that are too far removed from the established assumptions about banking to be perceived as part of the same phenomenon.