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.
Citi, the leading global bank, has approximately 200 million customer accounts and does business in more than 160 countries and jurisdictions. Citi provides consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, transaction services, and wealth management.
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U.S. International Development Finance Corporation (DFC)
U.S. International Development Finance Corporation is America's development bank. DFC partners with the private sector to finance solutions to the most critical challenges facing the developing world today. We invest across sectors including energy, healthcare, critical infrastructure, and technology. DFC also provides financing for small businesses and women entrepreneurs in order to create jobs in emerging markets. DFC investments adhere to high standards and respect the environment, human rights, and worker rights.
CAME is a Mexican SOFIPO founded 27 years ago with the purpose of improving people's quality of life and contributing to Mexican communities' development through financial services for small businesses. CAME is one of the leading institutions in microfinance in the country and supports more than 387,000 customers in 31 states in the country, with a 239 branch offices network. 65% of CAME's customers are women, one of the main economic groups in Mexico. More information at: www.came.org.mx