An Introduction to Microfinance in Action: From Mexico City to Toluca

Around 1pm last Saturday, June 22, I awoke to a loud thump and the sound of clapping passengers as our plane touched down. After much preparation and anticipation, I was finally back in one of the places I hold closest to my heart, Mexico City. That day marked my fourth time in Mexico City, and the beginning of my second two-month stint here. You might be asking yourselves why I would spend so much time in a place notorious for its appearance on the State Department Travel Advisory list. However, I have found myself oddly comfortable here, especially amongst some of the world's warmest and most welcoming friends. This time, though, I stepped off the plane into the Western Hemisphere’s largest city with more nervousness than expected.


 This time, thanks to the generosity of the Blakeley Foundation, I am here as an Accion Ambassador at Grupo Compartamos (Compartamos), one of the largest and most successful microfinance institutions in the world. If you are interested in microfinance at all, you are most likely familiar with the name. Until now, I knew microfinance strictly from a distance – through my microfinance course at the Fletcher School last semester as a part of my Master of International Business program, plenty of outside reading, online microloans, and various networking phone calls – but now I was given the wonderful opportunity to experience it firsthand.


Monday marked my first day of work, and it was packed with various activities to familiarize us with everything Compartamos - its history, model, staff, culture, and code of ethics. This also included two client site visits in order to give us a taste of Compartamos in action.


We squeezed into a small van and left Mexico City's morning congestion for Toluca, a city about an hour and a half away towards Mexico’s industrial zone. We first visited Compartamos’ regional office, where the main product offered is Credito Mujer, typically a 16-week line of credit given to groups of women for purposes of improving their economic productivity. This office is not a branch, as it does not perform any transactions, but rather a place for administrative and operational organization. We learned that the loan officers spend their days in the field on client site visits. They visit the same groups at the same time each week, alternating between disbursements and collections of the loans.


It wasn't long before we shuffled back into the van and headed to our first site visit - a disbursement for a group of 16 women, which held in one of the members’ home. The meeting commenced with the loan officer introducing herself, reviewing the purpose of the meeting, and taking attendance. Three new members were joining the group, so the loan officer reviewed the roles and responsibilities of both Compartamos as the creditors and the group members as the clients. Once everyone was in agreement, she then confirmed the amount being disbursed and called each member up one by one to receive her respective amount. The money is disbursed in the form of a money order, which the client then cashes at one of seven partner banks. As each person presented official identification and was fingerprinted, we had a chance to speak with some of the clients and hear about how the loans have impacted them. Most members of the group had been clients of Compartamos for over three years. When asked what it was like being a client of Compartamos, the responses were overwhelmingly positive. Similarly, most clients intended on staying with Compartamos for the foreseeable future. We asked specifically about their businesses. One woman owned a clothing stand and explained how having a lump sum of credit enabled her to buy larger quantities of clothes for a cheaper price. Another woman used the credit to pay for her children’s education while she sold shoes.


When everyone received their money orders, we thanked the group for sharing their lives with us and departed for our second site visit, this time for a collection. This group consisted of 13 women and met at one woman’s business, a small convenience store. Each woman had her receipt for the money they had deposited and official identification ready for the loan officer, who similarly called up each woman individually. This visit was much shorter, but I conversed with one woman who had been a client of Compartamos for 15 years, frequently expressing her gratitude for all that Credito Mujer has enabled her to do.


My first time observing microfinance in the field was absolutely fascinating, but it left me wanting more. I was impressed by Compartamos' passion for serving their clients and inspired by the strength and determination of the clients to improve their lives. Once back in Mexico City, we wrapped up the day by meeting our supervisors and I was thrilled to learn about my project for Fundacion Compartamos, one of Compartamos' exciting new initiatives. As I walked down the escalator and out the large, glass doors at 5:30pm, I hopped on the MetroBus with a smile, realizing that my nervousness had long disappeared.