From Microfinance Gateway: More Than Just a House: Building Sustainable Homes for Rural Communities in Mexico
Interview with European Microfinance Award winner, Cooperativa de Ahorro y Préstamo Tosepantomin
The Cooperativa de Ahorro y Préstamo Tosepantomin, which means "everyone's money" in Nahuatl, won the European Microfinance Award 2017 for its support to marginalized rural communities through housing construction projects, which include savings products, mortgages, and technical assistance. Álvaro Aguilar Ayón, Chair of the cooperative's Board of Directors, spoke with Portal de Microfinanzas about the cooperative's launch, their clients, sustainable housing product development, and the lessons learned along the way.
Gateway: Could you tell us about your institution, your mission, and the clients you serve?
Álvaro: The Cooperativa de Ahorro y Préstamo Tosepantomin was founded in 1998 and certified in 2013 by the National Banking and Securities Commission, which is the institution that regulates savings and loan cooperatives. This cooperative is located in the Northeastern Sierra of the state of Puebla, Mexico, and provides financial services to residents of the area, who are mainly indigenous Nahuatl and Totonac people. The cooperative currently has 35,000 members, of whom 78% are indigenous and 64% are women. We are also promoting the culture of saving among children, and we currently have 9,000 children who are saving. Though they are not yet members, the goal is for them to adopt a culture of saving from a young age so that, when they are older, they will be able to save, as well as benefit from other financial services from the organization.
The mission of Tosepantomin is to offer its members financial services that help them improve their quality of life and live "the good life," which we call Toyeknemilis in Nahuatl. The population in the area is largely indigenous, with no financing alternatives. When the cooperative was created, there was already a bank in the area, but it never offered loans to the residents, it only collected savings. The cooperative began to offer these services. Today, savings deposits stand at around USD 20 million and our loan portfolio is between USD 18 and 19 million.
Gateway: Your institution has just won the European Microfinance Award 2017 for its support to Mexico's marginalized rural communities through residential housing construction projects, offering savings products and mortgage loans, as well as technical advice. What are the features of these products? And why did you decide to launch them?
Álvaro: We decided to launch the savings and loan products for housing because we believe that all financial institutions should offer services based on the needs of the populations they serve. In our region, most of the population lacked adequate housing. That is why, since the cooperative was created, it has offered loans for those who want to improve their homes. However, since 2006, we set out to go beyond financing for home improvement and also offer financing for complete home construction, given that most of our members lacked adequate housing for the climatic conditions in the area.
To do this, we first suggest that those who can, should open a member savings account. We then offer a loan, and once we have the savings and the loan set up, we make arrangements with government institutions for a subsidy to ensure sufficient resources to build the house. We have been doing this since 2006, and so far more than half our members have benefited from this housing program.
In this program, the cooperative doesn't build the house for the families, but rather we work together on a "social construction of the home," where the family decides where to build, what materials to use, and what the design will be, and also hires the people they want to build the house. What we want to ensure is that the house is built in good condition, that the construction is of high quality and that, in addition, the family saves as much as possible on the building materials. This is why we offer technical assistance through a group of architects who help the families with discussions and the house design. They complete the architectural plans and the budgets. Once these are ready, construction begins. We have supervisors who, week by week, visit the masons who are building the houses to see that the construction is being done in accordance with the plans. This follow-up process is maintained until the house is finished.
Source: Microfinance Gateway