More on Getting out of Poverty in Mexico
I’d like to expand a bit on Mexico Cooks (a quite gorgeous and informative blog by the way) comment on microloans and on the Mexican poor in general which she ends sadly by concluding “until the average campesino [poor country person] can change his/her true mentality from “lo que Dios nos mande” [whatever God commands] to “SI SE PUEDE” [yes one can], little in Mexico will change..
I realize that I live in two areas of Mexico (the industrial corridor between Queretaro and León and Mexico City) which are probably exceptional, but I am more upbeat.
As I said previously, in these areas life has improved for campesinos in the ways I mentioned, and expectations have risen with experience in the United States and with television. It is my impression in these areas that the poor, or at least a proportion of them are very entrepreneurial and at least via family networks do engage in a good bit of upwardly mobile mutual help. It is also the case that there are a lot of very smart people in the countryside whose potential and capabilities are onlynow beginning to be tapped.
And if the INEGI figures for graduation from primary school (and hence presumably literacy and numeracy) are perhaps optimistic, the notion that 30% of the population can’t read or write seems pessimistic. This may be true of older and even of younger people in more remote areas but it does not square with my experience here.
I agree that the government micro loan programs are not the first choice of the poor. Nor would I expect them to jump in to official businesses except in very exceptional circumstances.
It is my impression that their loans come from other sources.
- Family.
- Employer. Indeed the kind of loans an employer can supply is an important consideration.
- Tandas. A group gets together and everyone pitches in a certain amount every week, receiving the total amount as a pay out when their turn comes around, a kind of enforced saving for 4 to 6 weeks, sometimes longer.
- Cajas de oro (golden boxes), private lenders, often themselves poor, who seem to me to charge very high rates (they also pay out very high interest), though not higher than other microloan programs you hear about.
But the expert on all this is C.M Mayo, author of the always informative and entertaining blog Madame Mayo, in her former incarnation as an economist at ITAM, one of Mexico’s leading private universities.
Las finanzas populares en México (Editorial Milenio, ITAM, CEMLA, 1995)
The result of pathbreaking research into how low-income Mexicans use credit, savings and payments services this book has been widely influential in Mexican microfinance policy circles. Still in print.
It’s high on my list to read as soon as I can get my hands on it.
Hi Rachel, thanks for the kind words. I’m kind of amazed at how that 1995 book still gets readers and google searches aplenty. Main message: many common assumptions about the poor and how they utilize financial instruments are based on superficial observation and/ or prejudice rather than fact and therefore, policies based on those assumptions are going to be problematic if not counterproductive. Also: be very wary of the numbers provided by organizations and institutions that are not closely regulated and supervised. Always ask, who’s funding this and what’s really going on?
There’s a lot of window dressing in this field. I also think that many poor people are actually and sometimes badly hurt by ineffective programs. But some things are not easy to measure, and who, in an aid organization, has the incentive to do so when it would not be flattering to the program?
The only thing I have written since about microfinance is a brief (and very sad) bit about a microloan program in San Quentin in my literary travel memoir on Baja California, MIRACULOUS AIR, (Univ Utah Press, 2002 and Milkweed Editions, 2007). (To protect their privacy, I changed the names of the people I interviewed there.)
The leading expert on microfinance in Mexico is Mary (Maria) O’Keefe, to whom, as a matter of fact, I dedicated LAS FINANZAS POPULARES EN MEXICO. I have enormous respect for her knowledge of this field, both in general and in Mexico in particular. She has recently started a blog with a team of other leading microfinance professionals in Mexico. You can follow that blog here:
http://microfinanzasmexico.com/
LAS FINANZAS POPULARES EN MEXICO is in print and available in Mexico City, here’s the link for more information:
http://www.cmmayo.com/aboutcatherinemansellcarstens.html
Saludos,
I am sure that you are quite right about the lack of serious empirical research on the poor and their financial instruments. And that’s not research that is that easy to do. Your point about being wary of numbers put out by organizations is well taken. Very tenuous connections with what’s really going on in many cases. Coming from a background in the sciences, I am frequently appalled at the statistics that float about in the newspapers, Mexico included, that seem to be deeply flawed both in the method of collection and in the interpretations drawn from them.
I have of course signed up for the blog you mention and will look out for Miraculous Air. Thanks so much for taking the time to contribute to this discussion.
Agreed on all counts – for here in Africa, as well. Microfinance has become the new ‘buzzword’ in this area, and there are numerous humanitarian organizations jumping on the band wagon with insufficient expertise or empirical base. It is very distressing.
Rachel, the INEGI figures–if I’m reading this correctly–aren’t for graduation from primary schools. They’re for matriculation in primary schools, which is completely different from graduation.
Here’s what is written at the top of the page you posted:
Matrícula escolar – nivel primaria – género – 2005/2006 – comparativo internacional.
Población en edad escolar y tasa neta de matriculación en primaria por países seleccionados según sexo, último año disponible.
I am more than willing to be wrong about the 30% illiteracy figure I quoted earlier–it is indeed a sad, sad figure if it’s true. But I stand by that quote until I find out that something else is the case.
Having said that, I agree with C.M. Mayo in her assessment of superficial and inaccurate observations. And interestingly enough, just yesterday I had intended to post the link to Mary O’Keefe’s very insightful blog.
Cristina
Cristina, You are completely right. I was reading inscription for graduation. So OK. And please stand by your 30% figure for the country as a whole. I want to reiterate time and again that I am talking about one of the most favored regions of Mexico where I would eat my hat if this were true. And since my interest is in the small steps that people take on their own to escape poverty, and since historically there are always leading regions for this, it does not phase me that other areas lag–doesn’t phase me intellectually, that is. From the heart, of course.
Seems to me too that there is another statistic that speaks to a change in attitude among the poor. Falling birth rates. These were not pushed by state or church. Yet (again I qualify) around here you are pressed to find a poor family with more than three children. Historically, parents change their family size this way only when they see better times ahead. Ojala.
Another article in today’s La Voz de Michoacán quoted the same statistics I mentioned earlier: 30% illiteracy rate in Mexico.
The data listed in the INEA table is from the 2000 INEGI census.
http://www.inea.gob.mx/transparencia/pdf/Rezago_2008.pdf
Cristina
2000 census. OK. But now I’m really confused because as I read the proportion of analfabetos in your link it is 7.8%, not the 30% you were talking about. Am I missing something?