Mexico City – During Jane Fraser’s visit to Mexico, Citi and the U.S. International Development Finance Corporation (DFC) announced a US$15 million local currency (~MXP 300 million) term loan to CAME, Mexico’s second largest microfinance institution. The financing will enable CAME to provide loans to more than 40,000 small businesses, boosting financial access and supporting economic stability for low income and underserved communities across nine states in Mexico that are especially vulnerable to financial shocks resulting from the economic impacts of the COVID-19 pandemic. These states include Guerrero, Hidalgo, Michoacan, Morelos, Nayarit, Oaxaca, Puebla, Tlaxcala and Veracruz. The financing will also focus on women—more than 65% of CAME’s borrowers are women-owned and women-led small businesses.
The World Bank estimates that in Mexico only about one third of individuals over 15 years old have a bank account and only one fifth of low-income people have bank accounts. Further, there are nearly four million small businesses that represent 47% of Mexico’s private sector-employment, but the formal finance gap is $164 billion (14% of national GDP).
“The ongoing COVID-19 global health and economic crisis has exacerbated income volatility in the country. Access to finance is essential to stability for small businesses and the communities we serve. This financing to CAME shows Citi’s commitment to promote financial inclusion in Mexico, so more people have access to the benefits of financial products and services that contribute to boost the country’s development,” said Manuel Romo, CEO of Citibanamex.
The financing, which is part of Citi’s $1 trillion commitment to sustainable finance by 2030, contributes to progress on several Sustainable Development Goals (SDGs) including Goal 1, which aims to eliminate poverty, Goal 5, which aims to increase gender equality and Goal 8, in support of expanding decent work and economic growth.
“DFC is proud to support CAME as they work to improve financial inclusion in southern Mexico,” said Algene Sajery, Vice President of DFC’s Office of External Affairs and head of Global Gender Equity Initiatives. “This investment will further expand access to financing for micro-entrepreneurs and small-business owners, especially women, to grow their businesses and help their communities thrive in the wake of the COVID-19 pandemic.”
“We are proud to get this second loan from Citi and DFC. It is key to strengthen and boost CAME’s efforts on helping small Mexican businesses—mainly women owned—specially nowadays when they are facing big challenges due to the COVID-19 pandemic. This moment is decisive for Mexico’s economic recovery, and we are ready to be a relevant part of it,” said Pablo Varela, Managing Director of CAME.
CAME has a 27-year history of strengthening communities by providing access to financial services and financial education, and promoting savings. The institution has more than 387,000 clients, with a presence in 31 states of the Mexican Republic, including 239 branches. CAME’s average loan size is $370, and 65% of its customer base are women.
Under the Global Inclusive Finance Framework with DFC, Citi has provided more than US$557 million in financing to inclusive businesses in 27 countries. To date, Citi has cumulatively disbursed more than US$1 billion in loans to microfinance institutions and inclusive businesses, reaching more than 4 million people, including 3.5 million women.