NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Wednesday, June 29, 2011

Patrimonio Hoy, the housing microfinance program of CEMEX, is expanding its lending program to low-income families in Mexico and four other Latin American countries with a partial credit guarantee of up to $10 million from the Inter-American Development Bank (IDB). As many as 750,000 families are expected to benefit over the next five years through this project.

Patrimonio Hoy is one of Latin America’s social enterprises that provide low-income families earning of less than four times the minimum wage in Mexico with access to microloans for construction materials and labor as well as technical assistance for the purpose of building or renovating their homes.

The IDB guarantee will allow the company to expand its offering of credit products that will, for example, allow them to pay for labor costs related to construction besides materials. The guarantee will also allow the company to scale up its operations in Colombia, Costa Rica, Nicaragua and the Dominican Republic.

The partial credit guarantee was approved on June 22 and the signing agreement is scheduled to take place during the BASE, the First Forum for the Development of the Base of the Pyramid, in São Paulo on June 28.

Patrimonio Hoy was created in 1998 to offer housing microfinance to low-income families, which are at the base of the pyramid in Mexico.

The partial credit guarantee was provided by the IDB’s Opportunities for the Majority Initiative (OMJ). In 2008, the initiative approved a $10 million partial credit guarantee to support the expansion of CEMEX’s Mejora tu Calle, an urban infrastructure improvement program in partnership with local governments that provides microcredit for families to finance street paving and the construction of sidewalks.

Created three years ago, OMJ has invested over $160 million to help develop base-of-the-pyramid business models to integrate the poor into the formal economy, improve their standards of living and promote greater social inclusion.