A Structured Approach to Understanding the Financial Service Needs of the Poor in Mexico

This CGAP Brief explores the financial habits, needs, and wants of low-income customers in Mexico. It focuses on the importance of working directly with customers to understand their financial habits and needs to design more meaningful financial products and services. The study hypothesizes that livelihoods are the key driver for peoples financial practices. It uses data from a nationally representative survey of 426 households with income less than USD 1,440/month. Findings include:

• Most people have similar concerns and aspirations, such as meeting childrens education expenses, meeting medical expenses, and achieving financial stability;
• There is a strong connection between people's money management strategies and the amount, variability, and regularity of income;
• People use savings and credit in different ways to deal with foreseeable expenses, unplanned events, and shortfalls;
• Liquidity management and consumption smoothing emerge as the top needs of most households;
• Regular income is an important driver of savings patterns;
• Informal financial and social networks are an important source of finance for low-income people.