Los creditos pueden cambiar vidas

Weavings, Christmas Ornaments and Life-Changing Loans


For more information, download our publication for free: Measuring the Effects of Productive Credit through Public Development Banks in Rural Mexico


Bernardina Cruz is nervous. It is the first time she is leaving Xochistlahuaca, a small municipality in southwestern Mexico, where she works as a weaver on traditional waist looms. 

The reason? She has been invited to tell her story of entrepreneurship at the IDB's 60th anniversary event in the capital. 

With a bag in each arm, Cruz hauls shirts, scarves and huipiles, traditional Mexican dresses with colorful and elaborate patterns. Depending on the level of detail, each one can take up to six months of work to produce. The simple waist loom, or backstrap loom, named for the strap that the user wraps around her hips to give the loom the tension and stability, is ancient in origin. For Cruz and many others in her community, the apparatus is also very much of the present. It is their sole source of income.  

Xochistlahuaca is the 16th-poorest municipality in Mexico. About a third of residents earn less than the minimum wage and the illiteracy rate exceeds 50% among adults, according to the country’s National Institute of Statistics and Geography. Here, more than 90% of people are indigenous, and mostly speak Mixtec, Nahuatl or Amuzgo, like Cruz. 

Building a business is not easy, as finding sources of financing with low interest rates is almost impossible. In Cruz’s municipality, unregulated financial services offer annual interest rates of up to 300%. The problem extends far beyond Xochistlahuaca; limited access to financing for micro, small and medium enterprises is one of the main barriers to the development of the region and other rural areas, and of the country in general.

To close this gap, Mexico’s National Financial Organization for Agricultural, Rural, Forestry and Fisheries Development (FND), a public development bank, grants loans directly or through rural financial intermediaries with the support of an IDB financing program. The program seeks to increase productivity and financial inclusion in the agricultural sector and in rural areas.

"The productive activities in rural areas, beyond the primary sector, are increasingly important and they lack financing. Therefore, we established these types of programs to support small- and medium-sized rural businesses, which allow them to improve their chances," explains Fernando de Olloqui, financial markets lead specialist at the IDB. 

Cruz took advantage of the opportunity. After receiving financial advice, she secured a loan that allowed her to buy more materials and hire more people to grow her business. She has now been a client of the same financial institution for 10 years, and has continued to receive, and benefit from, loan opportunities.

"Thanks to these loans, my business has been able to grow, I can help my family and other women in my community," she says, proudly displaying her textiles to the Mexico City audience. 



A loan for Christmas

Zully Olvera also shared her story at the 60th-anniversary event. She is a native of  Chignahuapan, a town in the center of the country that is known for its blown-glass Christmas ornaments. 

"In Chignahuapan, it's Christmas all year long," she says. 

Indeed, the town hosts some 200 workshops that produce a whopping 70 million Christmas ornaments per year. The industry is one of the community’s main sources of income. After studying marketing and opening a taco stand, Olvera, too, took up the family trade and began manufacturing and selling the handmade spheres. 

It was difficult at first, Olvera says, but talent – and opportunity – would allow her to grow:

"I did not know how to continue growing. I did not have the means or the space to manufacture more than I already had. Then, I found this loan."

She obtained a loan from the FND through a financing program for productive and inclusive rural development. Supported by the IDB, it promotes lending to projects led by women in marginalized areas of the country, and provides business advice alongside funds. In doing so, the program aims to chip away at a troublesome statistic: in Mexico, female labor participation stands at 58.5%, one of the lowest rates among OECD countries.

Olvera says she now has 60 staff, producing blown glass that is sold across Mexico, and even in several shops in New York. Other artisans of Chignahuapan have achieved similar business growth – so much so that the municipality now organizes an annual National Fair of Tree and the Christmas Ornaments. 

"I will not stop until everyone knows Chignahuapan as the city of Christmas ornaments," Olvera vows.



This and similar IDB programs have supported more than 50,000 rural productive organizations in Mexico in recent years, in the agricultural sector and others. 

"For us, these projects are of vital importance, because they have a component of financial inclusion and, ultimately, improve the income of people who lack assets and opportunities to grow," says the IDB’s de Olloqui.

However, in a situation with no shortage of obstacles, Cruz and Olvera agree that the biggest challenge was to take the first step: to overcome their fears and ask for support. 

"I never thought I would get here, and today, I have my own company," Olvera says. "That's why I tell all entrepreneurs to dare to take action, because it's really worth it."


For more information, download our publication for free: Measuring the Effects of Productive Credit through Public Development Banks in Rural Mexico


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