Mexican entrepreneur Carlos Slim Helú (Carlos Slim), through his charitable Carlos Slim Foundation, has teamed with Grameen Trust, an organization charged with supporting and promoting poverty-alleviating activities, to begin “Grameen-Carso” a micro-lending program in Mexico started with a Carlos Slim Foundation donation of USD 5 million for initial assets, and a guaranteed USD 40 million from the Carlos Slim Foundation as a credit line [3]. The terms and conditions of this credit line have not been disclosed. Grameen Trust will assume a management role for the program, bringing in experienced employees in the field of microfinance from Grameen Bank, the microfinance institution (MFI) whose model Grameen Trust attempts to promote in its ventures [1,3]. The managers will then, in the long term, “capacitate local managers in order to be in charge of procedures in Mexico” [3].
The program has been launched in Oaxaca in western Mexico, “country’s poorest states” that “struggles with ravaging poverty and extremely low education levels” [2]. The loans will be provided to women at an average amount of USD 267 [2]. The women will have 12 months to repay the loans. The interest rate is, as of yet, undisclosed [2]. Carlos Slim and Grameen Trust have plans to expand the program to other Mexican states in the future [2]. Microcapital gave a detailed report of the inception of this program in October of 2008 [4]. The article made clear the specific intention of Grameen-Carso to charge lower interest rates than MFIs currently in Mexico, such as Compartamos Banco, which charged an average annualized interest rate of 78 percent in 2008 [4,5,6,7]. Grameen-Carso does not yet report to the MIX Market, the microfinance information clearinghouse.
Grameen Trust was founded in 1989 by Muhammad Yunus, an economist and pioneer in microfinance [1]. It is a non-profit organization under the Grameen Family of social ventures [1]. Its two main programs are the Direct Implementation Program and the Grameen Bank Replication Program. The Direct Implementation Program builds “microfinance [programs] following the credit delivery and recovery mechanism of Grameen Bank in a specific location” [8]. It has seven projects in Costa Rica, Guatemala, Indonesia, Kosovo, Turkey, Zambia and the USA [8]. Grameen-Carso falls under this program, and is specified as a “Build, Operate, and Manage” program because management responsibility of Grameen Bank [3]. The Grameen Bank Replication Program “supports and promotes poverty focused microcredit programs” through training and technical assistance, and even funds certain projects, monitoring their performance thereafter [9]. The program, thus far, has 141 “replication partners” in 38 countries that it assists in microcredit programs [9]. Grameen Trust, as of July 2009, has “offered loans to more than 5 million people in 39 countries” [10]. An example of their work is their provision of technical assistance for the “Grameen-CPAD-Danone Micro-Credit Initiative,” a program that provides microloans to poor farmers and earthquake victims in China. This story was reported on by Microcapital in September of 2009 [10]. Grameen Trust does not report to the MIX Market.
The Carlos Slim Foundation was founded in 1986 by Carlos Slim, a Mexican entrepreneur who made his fortune through “strong Mexican equities market and the performance of his wireless telephone company, America Movil” [3, 11]. According to a Carlos Slim Foundation press release, the aim of the organization is to “deal with and reduce poverty, through the application and development of high impact programs aimed at the attention of specific areas such as nutrition, health, education and the creation of more and better job opportunities within the Mexican society” [3]. According to its website, the foundation supports charitable projects and its endowment is USD 3.5 billion [12].
By Christopher Maggio, Research Assistant
Bibliography
[1] Grameen Trust: http://www.grameentrust.org/objectives.html
[2] Reuters article entitled ‘Tycoon Slim, Grameen to begin Mexico microloans’: http://www.reuters.com/article/marketsNews/idUSN2441634420090924
[3] Carlos Slim Foundation press release entitled ‘Grameen Trust and Fundación Carlos Slim announced a strategic alliance to offer micro credits to the neediest in different states in Mexico’ http://www.carlosslim.com/responsabilidad_slimgrameen_ing.html
[4] MICROCAPITAL STORY: Mexican Billionaire Carlos Slim Donates $5m and Guarantees $40m for a New Mexican Microfinance Institution, Grameen Carso, Run by the Grameen Trust of Bangladesh: https://www.microcapital.org/microcapital-story-mexican-billionaire-donates-5m-and-guarantees-40m-for-a-new-microfinance-institution-in-mexico-run-by-the-grameen-trust-of-bangladesh/
[5]Compartamos Banco: http://www.compartamos.com/wps/portal
[6] Compartamos Banco on the MIX Market: http://www.mixmarket.org/mfi/compartamosbanco/data
[7] Bloomberg.com article entitled ‘Banco Compartamos Loans to Poor Mexicans Lift Stock: Week Ahead’: http://www.bloomberg.com/apps/news?pid=20601086&sid=aKWNLJl0._fg&refer=news
[8] Grameen Implementation Program: http://www.grameentrust.org/annualreports/2007/botbombooprograms.html
[9] Grameen Replication Program: http://www.grameen-info.org/grameen/gtrust/index.html
[10] MICROCAPITAL.ORG STORY: Grameen-CPAD-Danone Micro-Credit Initiative Aids Post-Quake Reconstruction in Sichuan, China: https://www.microcapital.org/microcapitalorg-story-grameen-cpad-danone-micro-credit-initiative-aids-post-quake-reconstruction-in-sichuan-china/
[11] Forbes.com article entitled ‘The World’s Billionaires #2 Carlos Slim Helu & family’: http://www.forbes.com/lists/2008/10/billionaires08_Carlos-Slim-Helu-family_WYDJ.html
[12] Carlos Slim Foundation: http://www.carlosslim.com/responsabilidad_ing.html#carso
Grameen Bank: http://www.grameen-info.org/
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