SOME mountainous parts of Mexico are so remote that the electricity grid fails to reach them, let alone the banking system. A five-year-old social enterprise, Iluméxico, hopes to change that. It provides more than 20,000 people with loans to buy low-cost solar panels and batteries, enabling them to switch lights on, watch television and charge mobile phones, sometimes for the first time.
It also introduces them to the financial system via those same mobile phones. It has launched a pilot project enabling them to pay off the loans in instalments via an SMS-based payment system, Transfer, owned by Banamex, one of Mexico’s biggest banks. Most have no credit history, so Iluméxico takes a big risk in lending to them. Manuel Wiechers, its boss, says they are often late with their payments because rural incomes are unstable. But they are keen to maintain access to credit, so their ultimate default rates (currently 5.8%) are only slightly above the national average.
Until recently such people had little hope of getting credit other than from loan sharks or pyramid schemes. Mexican high-street banks...
from The Economist: Finance and economics http://ift.tt/1Jlro4s
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