Building Assets to Reduce Vulnerability: Microfinance Provision by a Rural Working People's Union in Mexico

Proyecto Tequisquiapan (PT) provides protective microfinance services in a small region of rural Mexico, including, importantly, open access to deposit facilities. This paper examines PT's record in enabling people with different degrees of vulnerability to build assets and protect themselves from both sudden shocks and more predictable demands for lump sums of cash.

The paper found that:

• By providing deposit facilities in the communities through the voluntary work of the cashiers, PT operates almost without competition in relation to its insecure and most vulnerable members;
• The amount saved and the number of savings accounts in PT has continued to grow steadily.

The paper concludes that:

• PT is relatively more useful for the most vulnerable households;
• Its success relies on its small scale and on the commitment of its staff;
• Staff salaries are subsidized to innovation and experimentation in order to remain relevant to members changing and differentiated financial life worlds.