Diconsa to Offer Financial Services in Rural Mexico - Bill and Melinda Gates Foundation
The Gates Foundation is a private foundation with vast ambitions; one of its goals is to reduce extreme poverty worldwide. In this case study, the foundation has asked Burk to design a basic financial-services offering for inhabitants of remote communities in Mexico.
Description of Situation
The majority of Mexico’s rural inhabitants are relatively poor, relying in part on government benefits for their livelihood. As these people tend not to have bank accounts, they usually collect governmental benefits in cash from a limited number of state bank branches. These branches are often a long way away from where the benefit recipient lives and therefore it can take a lot of time and effort for the recipient to collect their benefits. In addition, traveling to the branches can sometimes expose the benefit recipient to crime along the way.
The Mexican government also owns and operates a chain of 22,000 stores throughout Mexico called Diconsa, which provide basic food, clothes, and other essential goods to the rural population. These stores are supplied via a network of central and regional warehouses and several thousand delivery trucks.
Burk has been asked to investigate and assess the possibility of using the Diconsa network to provide a basic set of financial services, supplementing the limited number of state bank branches. At first, the offer would start with the dispensing of government-benefit payments, and move progressively to include savings accounts, bill payment, insurance, credit, and other financial products.