Loan sharks do well here as do pawnshops, which aren't really any different. We often find little ads stuck under our gate urging us to separate ourselves from our favorite things in order to buy something which we would like to have as a favorite thing. I don't know if there are any usury laws in Mexico but if there are, they don't help in our neck of the woods. I do know that there is no regulation of the pawnshop business.
The government does make an effort to educate people, however. Unfortunately, it depends on the ability of people to read; to have access to the materials; and to have the strength to follow through. It's as hard not to succumb to the glitter here as it is in the US, especially when your house and your life are a bit dreary.
The current average annual rate for loans is over 40%; 24 or so million Mexicans have credit cards and many have trouble with them. Actually, credit cards aren't used anywhere as commonly here as in the US. People are accustomed to pay and be paid in cash.
Anyway, one of my favorite sites is called EnlaceVeracruz212 which in something of a blog format presents news of the State of Veracruz, much of it of an investigative sort. In the right hand bar there are also a number of links to local correspondents, but more about that in another post. Today on EnlaceVeracruz212 I found a post dealing with financial problems at Christmas which are exacerbated by "the lack of a culture of savings." Only ten percent of Mexicans, apparently save part or all of their Christmas bonuses.
In Mexico, everyone who works in the formal sector of the economy, that is whose job is "official" receives, by law, an aguinaldo, or half a month's salary, minimum, at Christmas time. Actually, they should be given it before December 20. Informal workers: construction workers, maids, gardeners, people that work in small stores and businesses that escape the eye of the government, etc, have no legal access to such a bonus and depend on the kindness of their bosses. Sometimes these bosses aren't generous. We first heard about these aguinaldos when we came, and when I asked a woman in my colonia if I should give our cleaning person an aguinaldo, she was very firm: absolutely not! Some beans and rice would be quite sufficient. In our colonia there are some very clear social distinctions, by the way. Our gardener and our former cleaning woman, we were told, were "country people," not of the same caliber as the people who are from the colonia: descendants of the original settlers.
The post on EnlaceVeracruz212 summarized advice from a government agency called PROFECO, which is the Federal Office for the Consumer (I have trouble figuring out just how to translate these government offices. This, in Spanish, is Procuraduría Federal del Consumidor. Procuraduría has the connotation I think of an office that handles legal matters. If anyone can provide further enlightnement, please do!)
In the article, the person in charge of the PROFECO office in Orizaba, Adolfo Olguín Castro, was interviewed. He said what will sound familiar to Americans, that 90% of those who received aguinaldos spent them all pretty much immediately because December is the period of the year in which the money is most needed for festivals and celebrations and gifts and so forth.
Sr. Castro had advice which will also sound familiar: spend what you need from your aguinaldo for the basics for your family first. Then devote a part to pay debts you've acquired during the year and to fix what needs fixing in your house. Then think twice before spending money buying stuff, for example an electric appliance: think about whether it is really necessary. He said that a healthy family financial situation is when the income is enough to cover all necessities including savings and debts so they don't cause worry.
Finally, Sr. Castro said it was important to do comparitive shopping: to make sure the product is good and the price is right.
PROFECO has a website and a magazine which is sold at the same places that sell magazines and newspapers. The magazine is glossy and filled with useful information presented in the manner of home magazines in the US. The website has consumer alerts and hints and advice of all sorts.
There's also a government office for the protection of people using any sort of financial service: banks, credit cards, loans, etc. It's called CONDUSEF and it is filled with very useful information including comparisons of services, rates, what they are, etc.
I think when they have access to them, people make use of government educational services. A lot of services provide stuff as well as information. For instance, DIF, or the equivalent of family services in the US, is presently helping people with food. These aren't food pantries as in the US, but a government program. Representatives turn up in most towns; you register, and you can get the basic food basket. There aren't, unfortunately, always enough slots. News of these programs flies through the community by word of mouth.