On Friday, March 19, IDB President Luis Alberto Moreno meet with Jose Ignacio Avalos, a leading social entrepreneur who has been instrumental in creating major nonprofit organizations that address critical needs of the poor in Mexico, including Mi Tienda, a company that supplies hundreds of small grocery stores in rural communities in Mexico. Mi Tienda, sponsored by private Mexican and international social investors, is transforming the distribution networks of its stores by establishing regional warehouses, streamlining the delivery of food, household goods and other products, making it possible for the stores to offer a wider variety of products at lower costs. Mi Tienda currently supplies over 800 stores but is expected to expand its distribution network to 22,000 stores in the coming years. Mi Tienda also offers training in accounting and management to the shops’ proprietors, enabling them to increase their profits and professionalism and offer new services to their communities. The IDB is supporting the scaling up of Mi Tienda’s operations through a US$2 million loan from the Opportunities for the Majority financing facility.
Ricardo Charvel, the VP for Institutional Relations and Communications from CEMEX, Mexico’s leading cement manufacturer, was also present at the meeting with President Moreno. Under Charvel's leadership, Cemex has been a pioneer in home improvement microfinance initiatives, which now include an innovative program that allows residents of low-income urban neighborhoods to invest in the infrastructure of their own communities by pooling individual microloans to fund street paving and other improvements. Under the Mejora tu Calle program, the cost of paving the streets is split between the residents and the municipality. Street pavement has many benefits for urban residents, including increased neighborhood security and better public health. A typical two-wage household participating in Mejora tu Calle can expect to see its family income rise by more than eight times the amount of its investment in the program over a five-year period.
CEMEX has long been a leader among Latin American businesses in making the base of the socioeconomic pyramid part of its core strategy. In the 1990s, it founded the Patrimonio Hoy program, which enabled 185,000 low-income homeowners to access microloans to improve their homes. Now, after successfully piloting Mejora tu Calle in selected cities, CEMEX is ready to expand the program into additional municipalities, potentially transforming urban landscapes across Mexico. The IDB is supporting the Mejora tu Calle program with a US$10 million partial credit guarantee and with US$250,000 in technical assistance resources.
Luiz Ros, manager of the Opportunities for the Majority initiative said, “With leaders like CEMEX and Mi Tienda, Mexico is serving as an example for the rest of Latin America and the Caribbean of the power of market-based solutions to overcome poverty challenges. I’m very pleased to be in Cancun to promote our partners from CEMEX and Mi Tienda, as well as to recognize others in the growing project portfolio of the Opportunities for the Majority initiative.”
Mi Tienda and CEMEX are among the first companies to partner with the initiative in its project portfolio, which currently stands at over US$100 million.
