Patrimonio Hoy
[Editor’s Note: On Sept. 18 & 19 BCLC will host its annual Global Corporate Citizenship Conference at the U.S. Chamber headquarters. The conference and its corresponding report, Development 2.0: Changing the Way Globalization Works, will focus on factors that affect global development. The following article, an excerpt from the report, is an example of those factors.]
Adequate housing is a basic human right enshrined in the Universal Declaration of Human Rights. Yet, Mexico faces a severe housing shortage that affects the daily lives of more than 20 million people.
In 1998, CEMEX decided to invest in research in order to better understand this segment’s behavior and find out if it was possible to design value offers that would contribute significantly to a better quality of life for low income communities through better housing conditions.
The northeast section of the city of Guadalajara was selected for this purpose, and our team worked to establish daily, direct, and close contact with this community.
We learned that the traditional construction process turned out to be intrinsically intermittent due to the inability to obtain resources, lack of knowledge, and access to technical guidance.
A low level of service resulted from a low buying power, causing a slow building process. This process was also very costly due to waste stemming from surplus materials that could not be stored for lack of space.
Our challenge was to produce a package that would solve most of the restrictions. As a result, we created Patrimonio Hoy, which has become a progressive housing program serving low-income communities.
Through the program, packages of materials are fragmented and ordered in an adequate sequence according to needs. The acquisition of these packages is facilitated by means of micro-financing.
With a previous saving of 20 percent of the materials needed for completing the construction project, credit is granted for the resting 80 percent.
The weekly charge per family is $180 Mexican pesos (about USD$16.50), $151 (about USD$14) of which pays for the materials, and the remaining $29 (USD$2.50) of which covers the services, including free access to technical consultants, fixed prices guaranteed for 70 weeks, one year of materials storage, and home delivery of materials packages.
The program creates a collaborative network within the community: families in need of better housing conditions, CEMEX distributors with presence in the regions who are in charge of delivering materials, and CEMEX providing families directly with financial services and technical advice.
By the end of May 2008, a total of 205,000 Mexican families had benefited through Patrimonio Hoy, building the equivalent of 105,000 ten-square meter rooms.
As a result, credits for USD $94 million had been granted, with an on-time payment rate of more than 99%.
The program has been successfully implemented in Colombia, Venezuela, Nicaragua, and Costa Rica. The idea is to assess the potential replication of Patrimonio Hoy in other markets where CEMEX operates and where the socio-economic conditions could make possible its financial viability.
Israel Moreno Barceló is founder and general manager of Patrimonio Hoy for CEMEX in Mexico.
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