| Goods |
Global DEVELOPMENT Program | September 2009 www.gatesfoundation.org | 1
Diconsa:
Financial Services for the Rural Poor
Grantee Profile
Most of Mexico’s rural poor live far away from banks and
financial institutions, making it difficult for them to gain
access to basic financial services like savings accounts, loans,
or insurance. Lack of basic, quality financial tools makes
it even harder and more expensive for poor households
to manage their money for daily living, to invest in
opportunities like education, or pay for unexpected expenses.
A new pilot program is exploring ways to make vital,
affordable financial services available to Mexico’s rural poor
at a place much closer to home: their local convenience store.
Diconsa, a Mexican government agency, manages a network
of more than 22,000 community-owned stores, which sell
food and other necessities in remote areas where some of the
poorest Mexicans live. Diconsa believes the stores could also
serve as a powerful platform to deliver
social welfare payments and savings
accounts to rural poor people.
To test its idea, the Mexican
government, supported by the
Bill & Melinda Gates Foundation’s
Financial Services for the Poor
initiative, launched a pilot program
in November 2008 to deliver
government cash benefits, primarily
Oportunidades payments, through
Diconsa stores. Oportunidades
payments are collected by an
estimated 5 million poor Mexican
citizens—including 60 percent of
rural families—at distribution centers
located mostly in urban areas. While
this is usually easier for those living in cities, beneficiaries
in remote areas are often required to travel long distances
to collect their cash payments. For many, it is a costly journey
that lasts a full day.
The pilot program, which started with six test sites, has
shown immediate benefits for both recipients and Diconsa
store owners. Instead of traveling many miles to collect
their payments on a fixed day, beneficiaries now have the
convenience of picking them up minutes from home on
any of five days during a designated distribution week.
According to surveys, beneficiaries—typically women
collecting payments on behalf of their families—reported
that the new payment system saves them, on average,
three to six hours of travel and $3 (U.S.) in travel costs.
IMPROVING ACCESS TO FINANCIAL SERVICES IN MEXICO
Source: Interviews conducted during Oportunidades payments and in Diconsa stores.
Before Pilot
Program
After Pilot
Program
1.5Hr
2.0Hr
0.5Hr
1.0Hr
0Hr
2.5Hr
3.0Hr
Average Time Spent Traveling
to Payment Location
After Pilot: Time
spent traveling to
payment location
reduced by 83%
Before Pilot
Program
After Pilot
Program
$1.50
$2.00
$0.50
$1.00
$0
$2.50
$3.00
Average Cost Per Beneficiary
($U.S.)
After Pilot:
Transportationrelated costs
reduced by 88%
Grant summary
Grantee: Diconsa
Amount: $3,584,983 (U.S.)
Regions Served: Mexico
Grantee Location: Mexico
Purpose: To improve access to affordable
financial services in rural Mexico through
a series of pilot programs.
Global DEVELOPMENT Program | September 2009 www.gatesfoundation.org | 2
Guided by the belief that every life has equal value, the Bill & Melinda Gates Foundation works to help all people lead healthy, productive lives. In developing countries,
it focuses on improving people’s health and giving them the chance to lift themselves out of hunger and extreme poverty. In the United States, it seeks to ensure that
all people—especially those with the fewest resources—have access to the opportunities they need to succeed in school and life. Based in Seattle, Washington, the
foundation is led by CEO Jeff Raikes and Co-chair William H. Gates Sr., under the direction of Bill and Melinda Gates and Warren Buffett.
For additional information on the Bill & Melinda Gates Foundation, please visit our web site: www.gatesfoundation.org.
© 2009 Bill & Melinda Gates Foundation. All Rights Reserved. Bill & Melinda Gates Foundation is a registered trademark in the United States and other countries.
Diconsa store owners have benefited from valuable training
to teach them how to operate the payment system. They also
noted increased sales because of the added foot traffic to their
stores by beneficiaries.
To roll out the program in all rural areas, Diconsa now
needs to install Internet service and telephones in many
of its stores to support point of sales devices, which manage
payment distribution and enable shopkeepers to confirm
the identities of beneficiaries using thumb scans and
biometrically-encoded smart cards.
The aim is to expand the program to let an estimated
3 million rural families collect their benefits payments at
Diconsa stores. At the same time, the Mexican government
plans to explore partnerships with financial institutions
to start offering savings accounts through Diconsa stores,
giving clients a place not only to collect their payments
but also to save and withdraw their cash as needed for
expenses and investments, make payments, and gain
access to other services. |