Background

Mexico is firmly established as a middle-income country, albeit with huge gaps remaining between rich and poor, north and south, urban and rural. Deep poverty remains in the southern part of the country, mainly in Chiapas, Oaxaca and Guerrero among the indigenous population. But even at the doorstep of Mexico City, in the State of Mexico, one can find the members of entire villages trying to get by on less than two dollars a day.

After the 1994-95 peso crisis, access to credit became difficult for most small and medium enterprises and impossible for the rural poor. Compartamos estimates that only about 12% of the demand for micro and small loans is currently met in Mexico, still leaving a large market potential.

Although Mexico has the highest GNP per capita in Latin America, the prevalence of malnutrition in 1995 in children under 5 years was significantly higher than in Brazil, Venezuela and even Bolivia, one of the poorest countries in the region. Gente Nueva played an important role in cutting the rate by more than half by 2000, whereas progress in addressing malnutrition stagnated in the other Latin American countries.