The second Bahoudii Crown Trust Microloan for 2011 was issued on 06 March 2011, to the Las Crisalias Group of San Martin Coapaxtongo, Tenancingo, Estado de México, Mexico.

This group, named after a local flower, is made up of nine members and lead by Señora Margarita Millan Alvarez is dedicated to the sale of food in the communities of Morelos and Toluca. Señora Margarita Millan Alvarez has been involved in the sale of food since she and her husband started their business 19 years ago.

This loan is being requested to allow the group to invest in supplies so that they may build their income and clientele.

Señora Margarita Millan Alvarez has a 20 year old son and three daughters, ages 14, 18, and 22, dreams of seeing her children achieve a professional careers so they will have a better future.

This MicroLoan was made under our agreement with www.kiva.org and has been disbursed through Servicios para el Desarrollo Comunitario, S.A. de C.V., CrediComún - a Kiva partner since February of 2010 - Servicios para el Desarrollo Comunitario, S.A. de C.V., CrediComún was created under Mexican law on March 11, 2005 and is a developing Microfinance Instituion (MFI) with a entrepreneurial and social focus. Their objectives are to promote productivity, revenue generation, and job creation.

They currently offer micro-loans through a variety of communal bank methodologies to members of under-resourced populations in Mexico and their mission is to contribute to the whole development of our clients with limited resources through microfinance, financial literacy training, and support.

CrediComún issues loans through a "Communal Banking Methodology" that includes:

Group creation: Serving groups of 12 to 30 people, principally women, who self-select membership. The members of the group rely on their familiarity with one-another and their faith in each other. All members must need small loans to continue their economic activities or to initiate a business and to ensure the quality of the groups' administration, each group must select an Executive Committee made up of a President and a Treasurer.

Moral guaranty: CrediComún only lends to groups in which all the members are responsible with regards to debt. In the case of one member's default for whatever reason, the other members are obligated to cover the default. Social pressure and moral solvency are integral elements of the payment of a loan's capital and interest.

Savings: Prior to receiving a loan, each Group complete three training meetings in which they must create an internal governance system, elect an Executive Committee, fill out all paperwork, and collect their "pre-credit savings", equal to 10% of the loan they are seeking and which will be held as a guarantee of payment until the loan is repaid.

Savings and monthly payments: According to the means of each and their previous loan amount, each group member may add weekly voluntary savings to the original savings amount. This savings account, along with cash incentives awarded by CrediComún, result in a gradual growth of the groups wealth. Loans are paid off through weekly payments of capital and interest, with each group member paying off the amount that they borrowed along with any proportional amount to cover any other group members late payment.

Loan volumes and terms: Loans volumes start small but grow through familiarity with the group, with each members, and with each members business. The time they have to repay the loan, is called a cycle; the first cycle lasts for 16 weeks while later cycles, with larger loan volumes, may extend out to 24 weeks. CrediComún also contantly emphasizes that all of their groups are made up of individual members with irreproachable backgrounds.

Kiva work through CrediComún for several reasons like CrediComún lends primarily to women and is focused on providing their clients with highly targeted loan products. They also are currently piloting social programs that include mobile medical services and market access for their clients artisanal products. CrediComún is actively trying to combat the exorbitant operational costs associated with doing business in Mexico through technological innovation aimed at increasing efficiency and lowering costs. These high operational costs in Mexico account for the higher interest rates in this region. CrediComún’s interest rate, while they appear high, are in line with the average in Mexico. In addition, CrediComún returns up to 50% of the interest charged to borrowers who pay on time. Also, CrediComún serves primarily serves rural borrowers (70% of their portfolio is rural) with very small loan sizes (about 4% of GNI per capita), which are much more expensive, thus driving up the interest rate. Kiva funds are supporting the further expansion of CrediComún’s social and technological initiatives.

More information about CrediComún is available at the website here: http://www.credicomun.com.mx/