Mexico - Seated inside their modest cinderblock house, Teresa
Gonzalez and her husband paint small plastic sculptures depicting
the Last Supper.
by step, we're getting there," Gonzalez says.
ago, she received a $80 micro-loan from Santa Fe de Guanajuato,
a non-profit lending association created in 1996 by President-elect
Vicente Fox, who was at the time governor of central Guanajuato
state. Santa Fe, which has granted about $11 million in micro-loans
to more than 40,000 enterpreneurs during the past four years,
is seeking to increase family incomes by promoting small investment
projects mostly run by women who have no access to traditional
a growing number of private sector groups are offering micro
loans in Mexico, the federal government has until now stayed
largely on the sidelines, instead channeling credit to bigger
companies through such development banks as Nafin or Bancomext.
But that will almost certainly change with Fox, whose conservative
National Action Party in July elections broke the tight political
grip that the Institutional Revolutionary Party enjoyed for
more than several decades.
to replace Mexico's Commerce Ministry with a new Economic
Development Ministry, whose priority will be the country's
long neglected small industry. And Norberto Roque, Guanajuato's
Minister of Economic Development, said he'll be joining Fox's
team in October to design a social banking program that would
take micro lending nationwide.
the micro bug from Bangladesh in 1995. Fox has provided no
details yet about how he'll transfer the Santa Fe model to
the country as a whole. But his participation in the Guanajuato
project goes back to the very beginning, according to Jorge
Farfan, general director of Santa Fe. Guanajuato's Roque says,
Santa Fe was inspired by Bangladesh-based lender Grameen Bank,
after Fox attended a conference given by Grameen founder Muhammad
Yunus in 1995. "Fox came back with a 10-page document
that he got from Yunus and we started working," said
Fe model is now spreading to other states, he added. The association
requires credit recipients to form a solidarity group with
10 to 20 members, of which 80% must be women. The group acts
as guarantor of the micro loans and is held responsible for
any default. Santa Fe has a team of 80 advisors, who supervise
the group's investment projects and are in close contact with
recipients, minimizing default risks.
Estrada, Santa Fe's head of loan collection, said the program
focuses on women because they have always been excluded from
credit opportunities and they demonstrate perseverance. "As
men we may not like this, but it's real," said Estrada.
"When women have an extra peso, they use it to help their
children. Some men, instead, may chose to go for a drink with
their buddies". Mexican women are proving to be pretty
solid credits. Santa Fe's non-performing loans average 4%
of its total portfolio, below the 6.2% default rate recently
reported by the country's commercial banks.
Fe is still losing money at this early stage, but its business
plan is to be self-sufficient and not require government subsidies.
the Guanajuato experiment national, Fox will have to address
legal issues, as micro lenders currently operate with no regulatory
framework. His administration would also have to create an
efficient army of loan collectors and set up funding mechanisms,
including a secondary market for asset backed securities.
"It's a nice project, but its implementation will be
pretty difficult and plenty of little details have to be worked
out", said Credito Familiar's Galan.
the ideology already appears to be in place. Officials with
Fox's National Action Party have criticized President Ernesto
Zedillo's outgoing administration for focusing too heavily
on subsidizing consumption, usually involving foodstuffs when
addressing the needs of Mexico's poor. The incoming Fox administration,
they say, will put greater emphasis on subsidizing productive
Santiago Perez, Dow Jones
Newswires, September 20, 2000.