Jose Medina owns a construction shop in Querétaro, Mexico where he sells materials and tools, as well as employs skilled workers who help execute repairs and other household jobs. He started the business over 12 years ago and, thankfully, it has served as a steady source of income for him and his employees over the years. On running his business, he says, “It has sometimes been a struggle, but we have pushed forward.”
Like many other small business owners in Mexico, Jose says that the COVID-19 pandemic has been difficult for his business. “It has been a battle,” he sighs. Fortunately, his business has weathered the challenges, and Jose is now looking forward to rebuilding and thinking about future growth.
Access to liquidity was key to keeping Jose’s business alive during the pandemic. At a critical low last year, he wasn’t sure that the business would survive. At precisely that time when he needed help the most, Jose was approached by Caja Bienestar. He needed credit to bolster his business, so the timing of the outreach was fortuitous. “We needed the credit because of the pandemic, and the support from [Caja Bienestar] has been significant,” he says.
He says that he used the credit to stock inventory, increasing the amount of items and diversity of supplies in his store. Not only did the investment in inventory increase revenue for the business, it also gave the workers he employs the opportunity to complete jobs and earn more income, multiplying the benefits of the credit to those around him who depend on the store.
“I would recommend the cooperative to others,” he says about Bienestar, noting that the process to apply for and repay credit is straightforward. He says the bulk of the process took place over the phone and the transfer was made directly into his bank account.
While Jose Medina’s business is now stable, he says that he would approach Bienestar for additional credit if he needed it in the future. In fact, he hopes to take out another loan soon — this time, a loan to grow his business. While he currently owns one shop, he hopes to expand and open several more locations, and he knows he can count on the Bienestar’s support when the time comes.
To develop financial services that improve financial health for low-income people, Accion Global Advisory Solutions, with support from MetLife Foundation, partnered with financial service providers like Caja Bienestar. Read more about the insights we learned from this project in our new paper, How providers can build products that improve financial health: Examples from Mexico and Chile.