Microfinance in Mexico: Women Bank On It

On a sunny day, 35 women get together on a patio to talk about a subject usually handled by men: money.

"Many municipalities here have microfinance and saving groups. However, most of them follow the norm of only accepting men," says Leonor Zárate, coordinator of the Savings and Internal Lending Community program Bancomunidad in Oaxaca, Mexico. "Bancomunidad" is a combination of the Spanish words "banco," meaning "bank," and "comunidad," or "community."

Adventurers may associate Oaxaca with world-class beaches like Puerto Escondido or the archeological site Monte Albán. But 16 different indigenous groups isolated amid rugged terrain also make the southeastern Mexican state one of the most culturally diverse. It is also one of the poorest states in the country.

In the Oaxacan town of San Juan Chapultepec, far from the tourist attractions, jobs are scarce.

"I found a job at a furniture store in another town. Every morning I left very early, and every night I came back very late," says Flor Cruz. "I felt I was neglecting my children."

Through a neighbor, Flor learned of Bancomunidad, an SILC of women. Catholic Relief Services' partner Centro de Desarrollo Comunitario Centéotl provides group members with an initial loan of 1,000 pesos (about $75) to invest in a small startup business. To be accepted as a new member or get a bigger loan, the women must agree to a code of ethics, participate in weekly meetings and demonstrate fiscal responsibility.

With her initial loan, Flor started a home-based business and now sells tortillas, tamales and tacos.

Becoming financially stable is an important step to becoming independent and providing for their families, says Zárate, who points out that this is true not just for Mexican women, but for millions of people all over the world.

Scheduling Family Time

Flor is focused. She has timed her schedule with precision so she can balance taking care of her children—ages 6, 7 and 12—and running her food business with her mother, Judit Alonso.

At 6 a.m., all five members of the household are awake. Judit grinds the corn, the main ingredient for the tortillas. Flor turns on the wood oven, gives breakfast to the children a half hour later, and walks them to school. At 8 a.m., the first customers arrive to purchase her homemade tortillas. She sells tortillas until 11 a.m. and then adds tacos and tamales to the menu until 1 p.m., when she closes for the day.

"Now that I work from home, I still work very hard, but I get to spend time with my kids," says Flor.

On Fridays, she has an alternate schedule that allows her to attend the hour-long Bancomunidad meeting. After the members have read aloud the 10 principles in the code of ethics, a group presents an everyday subject for discussion. Today's topic is migraine headaches.

Learning to Invest Wisely

Sofía López leads the conversation. "We found that a natural way to prevent migraines is to drink a lot of water and lose weight. To be honest, that's something I need to work on too." Laughs, nods and a dialogue follow. The women discuss other tips, such as using fragrance-free soaps or wearing sunglasses on bright days.

After the presentation, the women split into smaller groups to pay dues and discuss their financial statements. At this time, they submit requests for new loans and new member applications for consideration. Because the women contribute money to the group savings account that is used to increase the amount of future loans or to give initial loans to new members, everyone gets a vote. Decisions are made unanimously.

"I've learned how to invest my money wisely and the power of being united. I've also learned a lot from other women in my group in terms of responsibility and respect," says Sofía, who sells homemade yogurt. "This group is very different than others. It's not just about the money, it's about being part of a group that understands what you are going through and helps you move forward."