US$6 for a coffee?

A dollar means different things in different parts of the world. Just the other day, Starbucks announced it was hiking prices on its "fancy" drinks, pushing the tab for a "triple vanilla soy latte" to US$6.25. That's a lot of dough for a joe!

While in Mexico, it was jarring to be reminded of just how much, in terms of raw materials, can be purchased with the six months’ of savings (US$90) that many others throughout the world can make in a single day at work.

As we travelled around the mountains of Veracruz and joined the MatchSavings.org savers at their monthly meetings, it was remarkable to imagine what their US$15 deposit was worth in different places, different economies and different contexts. Here's a non-scientific smattering of things that cost US$15 in the United States:

1. A single drink at Starbucks – That's right… and you thought US$6.25 was bad! A blogger from The Consumerist tells the story of a guy who took a “free drink” coupon into Starbucks and did his best to concoct the most expensive drink imaginable. The result? A “venti soy hazelnut vanilla cinnamon white mocha with extra white mocha and caramel, plus 13 espresso shots.” Final cost: US$13.76.
2. The "Modern Warfare 2" Stimulus Map Pack – X-box 360 gamers were asked to shell out US$15 for a pack of add-on levels for this popular video game.
3. A trip to the movies – 3D movies might be eye-popping, but all that pop comes at a cost. Many theaters now charge as much as US$15 for a single admission and up to US$17.50 at IMAX theaters. Remember when matinees were just US$3?
4. 250 megabytes of iPad data – If you invested in Apple’s latest offering, you'll likely want to pay for a 3G data package so you can read blogs like this one when there's no wireless around.

US$17 for a movie?

In other words, US$15 can disappear really, really fast.

But in rural Mexico, US$15 means something quite different. Time after time, the MatchSavings.org savers told us how difficult it was to scrimp and save to build up the US$15 (200 pesos) to make their deposit. As strange as that contrast is — the fact that a family’s monthly savings in Veracruz could be almost completely spent down on a single drink from Starbucks — it’s also inspiring. It’s a reminder of just how transformational MatchSavings.org can be for the folks in communities like Ejido La Esperanza and Cuiyachapa.

Using our new monthly match feature, US$15 can help Carmen buy a new roof or give Domingo the opportunity to pour a concrete floor in his home. And for the price of a couple video game levels, that’s a pretty good deal.

Teresa Jimenez Rodriguez, a 62-year-old widow, invited us in to see her new cement floor, purchased with her matched savings in April.

It was a long, exciting and inspiring week of travels in Veracruz state, Mexico! We finished the trip on Friday with a visit to the Caja Yanga credit union branch office in Coscomatepec, a small town about 15 miles north of where we stayed in Córdoba. From there, it was all uphill - first to Cuiyachapa, then on to Portrero Nuevo, a high-mountain community nestled in the foothills of Pico de Orizaba [Orizaba Peak].

Cuiyachapa appeared to have fairly similar income levels to the other communities we're working with, though it had more of a "town" feel. The streets were laid out more or less in a grid, and the total population was visibly higher than in villages like Ejido La Esperanza or Ayahualulco. The living conditions were typical for the region - cardboard sheeting on the roof and packed dirt for flooring.

After making our rounds with the new savers in Cuiyachapa, we met with Teresa Jimenez Rodriguez, one of the savers who participated in the last group and received her match for housing in April.

The difference between Teresa's house and those of the savers we visited was incredible. Using her savings match, the 62-year-old widow had poured a high-quality concrete floor for the entire house - and painted it bright red! The addition of the hard floor over the packed dirt had completely transformed the interior. The inside of Teresa’s home now had a fresh, well-kept and – most importantly – dry feel. The dank, musty moisture that dominated the dirt-floor homes we’d visited was undetectable in Teresa’s home, and it was immediately clear how the new floor had significantly improved her quality of life.

Dolores's father was saving to replace the wooden walls of their small kitchen with cement block and to build an extra room off the back so the five family members can move out of the one-room lean-to they currently share (above).

Ready for the final stop on our week-long journey, we piled back into the truck and started the long, rocky ascent to Potrero Nuevo. Though the village was only eight miles north of Cuiyachapa, the roads were so bad that the trip took more than an hour to reach by car.

The road was swallowed by dark billows of clouds within minutes, and the world faded into a gray tunnel, interrupted only by periodic hairpin turns as we zigzagged into some of the highest mountains in the country. In the final minutes of the drive, we emerged through the ceiling of clouds and arrived at Portrero Nuevo. There we were treated to a panoramic view of the southern face of the massive volcano above, which flashed in and out of sight as the clouds marched across the ridgelines.

A community of about 35 families, Potrero Nuevo is home to 14 savers, most working toward various housing improvements - new roofs, floors, bathrooms and living quarters. We met with the group at a small building that served as a health clinic for a travelling doctor at the center of town. Although most of the women in the community had only primary school educations, they were proud to share with us that that a school teacher had started to travel to the community to provide primary and secondary school classes for the women once a week. When asked why it was so important for them to finish school, they told us they wanted to be able to help their children with schoolwork so they could get ahead in life.

Before heading back down the mountain, we were treated to lunch in Portrero Nuevo.

Just a walk down the dirt road, we visited with Dolores, the daughter of 68-year-old saver Carmelo Bernabe Perez. Carmelo was working in his potato field when we visited, but Dolores showed us the one small wooden structure they owned and used as a kitchen. When asked where they slept, we were surprised to see her point to the one-room lean-to structure off the back of her relative’s house next door. Dolores shared the space with her father, a 30-year-old sister and two young nephews. The room was about the size of a large walk-in closet with two beds. Dolores said she and her sister were also helping her father save so they could turn the wooden walls of the kitchen into brick and add another room behind it for the family’s sleeping quarters.

While Dolores’s living situation shocked us all, our experience with Teresa earlier in the day was a reminder of just how much could change with a relatively small investment in basic housing materials. As we left Portrero Nuevo, waved goodbye to Cuiyachapa and began our journey back to Madison, Wis., we couldn’t help but wonder what life changes awaited the people we’d met that week. We’re looking forward to sharing more of their journeys with you when the savers receive their matches in November.

Meet more people like Dolores and Teresa and consider making a match to help more people save for change in their lives. Just US$15/month can change a family’s life!

Coffee beans growing on the side of the road near Ejido La Esperanza.

Coffee is a major cash crop in the central region of Veracruz state, and also a matter of pride. Yesterday, when we met with our partners at the branch office of Caja Yanga credit union in the town of Ixhuatlán del Café, we asked one of the field officers how the local organic grind compares to the coffee in nearby Zongolica. He smiled coyly and explained that Ixhuatlán's crop was superior. We made sure to stock up on the way out of town, and plan to pitch the two coffees against one another in a head-to-head when we get back to Madison. As of now, all agree that Ixhuatlán wins the “smell test.” Watch this space for the results...

Later, as we walked around the streets of a small community called Ixcapantla about 30 minutes from Ixhuatlán, we had a long conversation with a woman named Carmen, who gave voice to a lot of the frustrations and cruelty of the generational cycle of poverty that perpetuates the conditions we've seen in these rural communities. Carmen, a mother of three who runs a small store out of her home, tearfully explained that she had hoped to go to college and have a career. But her parents were unable to cover her school costs, and she remained in the community after secondary school.

Now she finds herself in a similar position her parents were in years ago - she has a precocious daughter about to finish secondary school who wants to become a doctor or a teacher, but Carmen and her husband aren’t sure they’ll be able to afford the costs of her education.

Carmen is worried that she won't be able to pay for her daughter's college education.

Although Carmen is saving through the MatchSavings.org program to replace her leaky cardboard roof, the officers from Caja Yanga explained that the credit union offers a number of services to help families pay for their children's education and that they would follow up with her to work out a plan. Namely, the credit union has a scholarship program that awards grant money to high-achieving students throughout their academic careers if the student saves a minimum 20 pesos (US$2) per month at the credit union for a year.

In many ways, the conversation was a fascinating illustration of the power of small, focused microfinance programs to catalyze life-changing "financial inclusion." If Carmen takes advantage of the scholarship program, she'll be tapping into a whole suite of services and opportunities that were unavailable before she was brought into the formal financial system through MatchSavings.org.

We talked with the savers at Ejido La Esperanza about how the program is progressing.

After a night of deafening thunderstorms in Córdoba, we made our way to the city of Yanga, some 15 miles to the southeast. Yanga feels more or less similar to Zongolica, but without the towering presence of the mountains. Though the two cities are only about 25 miles apart, Yanga sits on the other side of the sharply defined boundary of mountains that runs through the southern spine of the country. The town is surrounded by a vast expanse of corn and sugarcane fields that stretch to the distant hills.

From Yanga, we headed into the maze of small, muddy, extensively-potholed dirt roads that winds through the corn fields. Although we had left the high mountains behind, poorly maintained roads are a fact of life in the countryside here. More than once, we heard the cringe-inducing sound of a particularly large rock raking across the bottom of our little Nissan's muffler.

The road climbed into the low hills, and after about an hour, we were treated to some fantastic views of Yanga and the plain below. At bit farther, we finally reached the community of Ejido La Esperanza.

The biggest difference between Ejido La Esperanza and the first three savers groups we visited this week was that in this community, the majority of savers were men, all of whom either owned land or worked as hired field hands on local farms. Their greatest needs were improving their modest fields or homes.

After the meeting, we met Domingo Herrera Flores, an 18-year-old farm worker and one of the youngest savers in the program. Like his father and almost all of the other men in the community, Domingo works for-hire up to five days a week in nearby fields. On many weekends, especially during times of the year when there is little work available on the farms, he travels up to three hours by "camioneta" [truck taxi] and spends Saturday and Sunday working as a car mechanic or street vendor in the cities.

At 18, Domingo is one of the youngest savers in the program.

At about 200 pesos (US$20), the cost of the taxi is incredibly high relative to the savers' incomes, which generally range from 700 - 1000 pesos/month. In terms of relative cost, that's about the equivalent of flying from World Council of Credit Unions' (WOCCU) headquarters in Madison, Wis., to New York City week after week...

But for Domingo, it's worth it. He said that he can often earn more money during a weekend in the city than he can during a week in the community, which makes the trip worthwhile even after the stiff transportation costs.

Back in Ejido La Esperanza, Domingo has been able to construct a relatively solid home in the community. The walls are made of cement blocks, and the back of the house looks out onto a beautiful view of the sugarcane fields in the valley far below. The floor, on the other hand, is compacted dirt. He told us he plans to use his savings and match to pour a concrete floor to keep the water out.

If savers like Luisa (see yesterday's post) represent one aspect of the program - combating the relentless blight of poverty - then Domingo represents another. He's young, charming, entrepreneurial and hungry for opportunity, but he lives in a community with very limited economic options. In many ways, he's the exact type of person who's poised to benefit most from the financial opportunities he's gaining through MatchSavings.org.

After a good night's sleep at the quaint hotel in Zongolica, we regrouped in the morning over breakfast at the little café on the first floor of Caja Zongolica credit union's corporate headquarters. There we discussed our trip up to Ayahualulco, the second and last community that we would visit in the region.

A couple of curious children looked on while the savers made their deposits in the municipal building at the center of town.

A cup of locally grown coffee later, we packed up and packed back into the truck taxi for our second venture into the mountains. Our driver looked to be only about 16 years old but proved to be incredibly skilled. He had no difficulty whatsoever steering a small, old, standard-shift truck loaded with seven people up and over steep inclines that edged a many-hundred-foot drop-off just a few feet to our left.

Upon arriving safely to Ayahualulco, we joined the savers at their monthly meeting with the credit union field officer, where they were making their third of six deposits. Most of the savers spoke or at least understood Spanish this time, which made our conversations flow a bit more smoothly.

Two women there led us down the road from the municipal building after the meeting to the head of a small, dirt trail that ran beside the trees below. Slipping and sliding on the mud, we carefully picked our way down the trail and followed our guides to the savers' homes.

As we interviewed the savers and photographed their families, it was hard not to be moved by the dissonant mixture of human poverty on the one hand and the shocking beauty of the natural environment on the other. The houses were nestled along the steep slopes of the eastern face of a large mountain, giving way to a panoramic view of the valley below. Just a glance in the other direction was the reality of rural life in the mountains.

Like the savers in Axoxohuilco, the participants in Ayahualulco are saving to purchase materials to improve their homes, which lack even the most basic necessities — proper roofs, floors and walls to keep the elements at bay.

A bit further down the mountain, we were humbled to encounter one of the poorest living conditions we've seen yet among our savers. Luisa García Galvez, 53, lives with her husband alongside the dirt road leading back to Zongolica. Like many families in the region, their living quarters consisted of two wooden shacks — one for cooking and the other for sleeping.

The cardboard roof of Luisa's two-room home was in complete disrepair. It was hard to imagine a family of three being able to call it "home."

The smoke-filled kitchen was similar to what other families in the community had, but the living quarters were in complete disrepair — the roof was made of a flimsy cardboard material, water-logged to the point that it looked more like cloth draped over the rafters of the house than a roof. The floor was a hard-packed surface of dark red soil that was almost completely saturated with water, audibly "squishing" underfoot. The room was filled with the dank scent of wet soil, rotting wood and water-logged fabric.

Like most of the savers in the program, Luisa's life is almost completely circumscribed by the limitations of her environment. She relies on her husband's income, just US$4/day when there is work at area farms, and about US$60 every two months from the government's welfare program. With seasonal income, having a safe place to save money becomes all-the-more important.

As dismal as her situation is now, it was invigorating to hear Luisa's excitement about the proposition of installing a new roof made of corrugated metal sheeting. It's rare to see a case in which so little — just US$90 worth of materials found at most large scrap yards — can make such a transformational difference in someone's life. And with continued access to financial services right in her community, the opportunity to improve her living conditions will only grow.

In the afternoon, we made the trip back into the valley to spend the night in Córdoba, which would be the launching pad for the second part of the trip with Caja Yanga credit union.

Check out our Facebook page for more photos of the savers in Ayahualulco.

 

As we drove from Córdoba to Zongolica, we got some incredible views of the surrounding mountains.

After enough travel setbacks for a year (let alone a day), we finally made it to Mexico late Sunday night!

An early morning bus ride on Monday brought us to Córdoba, a city of 140,000 about 60 miles inland from the port city of Veracruz. After meeting up with Alma, our colleague who works for World Council of Credit Unions' (WOCCU) Mexico office, we started the winding and upward drive further west to Zongolica, a small town nestled in the mountains where our new partner credit union is located.

As Alma deftly navigated the maze of switchbacks and hairpin turns, one vista gave way to another, each seeming different than the one that came before. The mountains of western Veracruz are gorgeous and altogether unlike anything in the United States - a strange combination of "round" and "pointy," intensely green and dotted with small houses and other hints of human habitation. Above it all looms the massive Pico de Orizaba, an 18,000-foot volcano that played a central role in the mythologies of the Aztecs and Totonacs.

Once in Zongolica, we met briefly with the credit union's executive management and board of directors to discuss how the program was going. Though some people in the region were skeptical that they could "double their money," it helped that the credit union was well known and respected among the communities and that the field staff spoke the indigenous language of the region.

The all-women savers group at Axoxohuilco (and a couple of husbands who wanted to pose for the photo). We visited on the day the savers made their third of six deposits.

We then piled into a small pick-up truck and began the long, difficult climb to the mountain community of Axoxohuilco, where a group of 35 women savers were making their monthly deposits.

Axoxohuilco is as beautiful as it is remote. Though it's only about 17miles by car from Zongolica, the roads are essentially 500-foot stretches of rockslides pitched at 45 degree angles, and it took us about an hour and a half to make the trip by truck.

As the savers made their deposits, the general manager at the credit union talked with them about the program and asked for their feedback on how things were going. Conversation in Axoxohuilco is complicated by the fact that only a handful of the 240 residents can speak Spanish; the rest speak Náhuatl, which was once the imperial language of the Aztec empire. For that reason, all of the credit union's field officers speak Náhuatl, so we had good translators on hand.

Rosa Tlehuactle Mayahua said it's hard to get by when her son's back problems worsen and he can't work. During those times, she sells one of the few pigs she raises to bring in some money.

After snapping some photos, we accompanied a few of the savers to their homes, where they shared with us about their families, their living conditions and their hopes for the future. Like many of the communities that the MatchSavings.org program serves, Axoxohuilco is essentially a subsistence farming community that survives on limited local production and government assistance. When there is no agricultural work in the region, most men travel to other parts of Mexico or the United States to earn a living. The majority of women in the community receive sparse assistance from a government welfare program called "Oportunidades."

Accordingly, the living conditions in the village were grim. None of the houses we saw had a water-tight roof, and very few had cement block walls — especially serious problems during the rainy season between May and October. For houses without concrete floors, the water that leaks in through the roof and walls soaks the dirt floor and transforms the inside of the house into a big mud puddle.

Nearly all of the participants in Axoxohuilco are saving to purchase and install metal sheeting to shore up their roofs and waterproof their homes, and a handful are saving for cement blocks.

In the late afternoon, we packed up and headed back down to Zongolica, which felt like a bustling metropolis compared to Axoxohuilco. After a US$20 hotel stay and cold (ahem, "invigorating") showers the following morning, we headed to the community of Ayahualulco to meet more savers.

Check out some of the pictures from Axoxohuilco on our Facebook page, and don't forget to follow our journey on Twitter!

 

We're headed down to Mexico next week to visit some of the 280 new savers that just made their first deposits with our partner credit unions. As we travel to their communities in the mountains around Yanga and Zongolica, we'll be uploading a steady stream of pictures, videos and blog posts about the savers and their families.

María is saving to replace the deteriorated roof of her home with new corrugated metal sheets.

In advance of that "on the ground" look, we wanted to take a more general look at what life is like in rural Mexico. How do our savers earn a living? How much do they make? How are their home lives structured?

Most of our savers fall into a socioeconomic category referred to as the "working poor." They don't live hand-to-mouth, but they're pretty far along what can be thought of as the "spectrum" of poverty.

What does that mean in terms of raw income? Most MatchSavings.org savers live in families of about five people that survive on a total income of US$90 - $150/month, with the average falling around US$120/month. For a family of four, that's about US$1 per day per person.

The earnings come from a combination of sources. Most of the men in the savers' communities are employed as agricultural workers on farms that produce corn, beans and potatoes. The women often supplement the family’s income by growing produce or by running small grocery shops.

Reina Sandoval Garcia received cement blocks to build a stove that will vent the wood smoke directly out of her kitchen.

Most of the savers live in substandard housing that's not up to the basic task of keeping the elements at bay, especially during the rainy seasons. Basic amenities are often absent – access to clean water can be unreliable, and bathrooms as we know them are a luxury. Traditional kitchens fill with smoke from inefficient ventilation, and houses are often constructed with worn, drafty planks

The good news is that most of these challenges can be overcome with comparatively small investments. Poorly ventilated cooking areas can be upgraded with cement stoves; deteriorating walls and leaky cardboard roofs can be swapped out for concrete blocks and metal sheeting; water tanks can be built for easy access to drinking water; and crop yields can be increased with smart investments in supplies and labor.

Many of the savers' challenges are relatively low-hanging fruit – we can put a roof over an entire family’s head for less than the cost of most monthly cell phone bills. Not only that, but the savers gain access to affordable financial services and the dignity and opportunity to continue saving for the future.

 

When the word "Mexico" pops up in the American media, the news is usually pretty bleak – hotly contested debates about immigration policy, drug violence in Juarez and the controversial legislation recently passed in Arizona.

In the process, Mexico is effectively reduced to "the U.S.-Mexico border," collapsing the rest of the country (and the people who live there) into a host of domestic U.S. issues that have little to do with Mexico itself.

That begs the question – who are the people who participate in the MatchSavings.org program, and where do they live?

Celia used her matched savings to lay a concrete floor in her home.

First, some basics about how Mexico is sliced and diced into political units. "Mexico" is really the "United Mexican States," which is just as it sounds – a collection of 31 administrative states glued together by a federal government, just like the U.S.

MatchSavings.org is run by World Council of Credit Unions, an international trade association and development agency for credit unions that is currently working with 54 credit unions in 22 states to bring affordable financial services to people living in remote communities. MatchSavings.org partners with two of those credit unions in Veracruz, a thin, ribbon-like state that's nestled along the Gulf of Mexico in the southeast part of the country.

Veracruz ("True Cross") is a highly populous, culturally diverse and geographically varied region:

• With more than 7 million people, it's the third largest state in Mexico.
• 13 indigenous cultures are represented, and three indigenous languages are widely spoken.
• In 2007, the average daily wage in Veracruz was about US$13/day; the minimum wage is about US$4/day.
• On the coastal plains near the Gulf, the climate is hot and wet. In the high mountains further inland, it's considerably cooler and extremely rainy (which is why so many of the MatchSavings.org savers are working toward making improvements to their roofs...).

Yanga and Zongolica, the hometowns of our partner credit unions, are more than a two-hour drive inland from the coastal port city of Veracruz (see the map below and zoom in to see the layout of Veracruz in more detail).

Stay tuned for Part 2, which will detail the daily lives of our savers. What kinds of jobs do they work? What kinds of family structures are normal? How much money do they earn? Let us know if there's something in particular that you'd like to learn more about!

 

View MatchSavings.org in a larger map

Welcome to the MatchSavings.org blog!

The next couple weeks are going to be some of the most exciting yet! Hot on the heels of the first two rounds of the program with Caja Yanga credit union, we’ve partnered with a second credit union called Caja Zongolica, located in an indigenous, coffee-growing region of Veracruz.

Over the course of the last two months, credit union field officers have traveled to nearby rural communities and enrolled 280 new first-time savers to participate in the next round of the program. As of just a few days ago, all 280 savers have officially made their first of six monthly deposits for housing, microbusiness or educational goals.

In the coming weeks, we're going to be flooded with new stories and photos of the savers from our field staff. What's more, we'll be headed down to Mexico at the end of the month with cameras and our Flip video in tow to bring their voices and emotions back to you!

Stay tuned for all the great content that's going to start trickling back from the mountains of Veracruz - and please chime in on what you'd like to see as we share a more personal side of the complex, exciting, and ever-changing world of microsavings and international development.

Keep your eyes peeled!