For Mexico’s Informal Vendors, Microcredit Offers Potential Relief, Threat of Debt

Informal vendors in Mexico, many of them women, enjoy autonomy and flexibility in how they work. But the coronavirus crisis has underscored the drawbacks – and dangers – of operating outside the formal economy.

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For Mexico’s Informal Vendors, Microcredit Offers Potential Relief, Threat of Debt

Mar García, GPJ Mexico

Noemí Peralta sells homemade desserts outside a public school in Mexico City. Six years ago, she decided to become an informal merchant because it allowed her more time to care for her son. With classes suspended in Mexico due to the coronavirus, she will lose the daily income she uses to support her family.

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MEXICO CITY, MEXICO — Julieta Salinas’ face is barely visible behind the stacks of candy and toys piled onto her cart. She’s stationed in front of Maestro Manuel M. Cerna Castelazo Elementary School, waiting for the final bell to ring.

“I like to tend to and chat with the kids,” Salinas, 50, said in mid-March, as she watched a group of children decide which of her wares to purchase. She has been selling goodies to students outside three different schools in Mexico City for 20 years.

But her daily routine has been upended as the threat of the coronavirus has since shuttered schools here.

Vendors selling candy, toys and homemade treats to children at the end of the school day are common in many parts of Mexico. But like many informal workers around the world, Salinas is now jobless. On March 14, Mexico’s Ministry of Public Education announced the suspension of classes at all levels from March 23 to May 30, as a preventive measure against the worldwide spread of the coronavirus. The decision to reopen schools after that date rests with each state, and classes in Mexico City are now not scheduled to resume until at least August.

Salinas is one of more than 31 million workers in Mexico’s informal sector. She says the hasty decision to suspend classes didn’t allow her to save the money she needs to pay the family bills.

“Look, I’m a single mother. I don’t know what I’m going to do to pay for things, mostly food. If we don’t sell anything, we don’t have money to live,” Salinas says.

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Mar García, GPJ Mexico

Julieta Salinas, who has been an informal merchant for 20 years, arranges the candy and toys she sells outside a Mexico City elementary school. Schools have closed to block the spread of the coronavirus, and Salinas will have no income until they reopen.

Her plight is shared by many street vendors in Mexico City – the majority of whom are women, says Diana Sánchez Barrios, 45, an activist and former street vendor who leads the Chambeando Ando initiative. The group, whose name means “I’m working,” was established in 2019 to legitimize and defend small businesses in public spaces.

Sánchez Barrios is the daughter of street vendors and says she began selling chocolates herself at age 9. She did that work for more than 15 years and says she saw her parents and other vendors arrested and harassed by authorities. Sánchez Barrios says there is no disputing that women and girls who sell goods informally will be hit hardest by coronavirus restrictions and quarantines.

“They are all ages – disabled women, young women, elderly women, and even girls who are 13 or 14 and already moms. Nobody will give them jobs because they didn’t finish school. They don’t have the right to health services, they don’t have the right to home mortgages for workers, nor can they ask for bank loans,” Sánchez Barrios says.

On March 24, Mexico City Mayor Claudia Sheinbaum Pardo announced the addition of 200 million Mexican pesos ($8.7 million) to the city’s Economic Development Fund, which would provide microcredit to support “the development of productive activities for self-employment,” among other initiatives.

Look, I’m a single mother. I don’t know what I’m going to do to pay for things, mostly food. If we don’t sell anything, we don’t have money to live.

It’s still not clear whether the subsidy will be available to informal workers like street vendors and hawkers. But two days after the announcement, one of Salinas’ friends told her about the Economic Development Fund.

“I registered on the internet,” Salinas says. “They told me they would contact me by email, hopefully.”

But one-time subsidies aren’t realistic solutions for informal vendors like Salinas, says Gabriel Badillo, an academic technician at the Institute of Economic Research at the National Autonomous University of Mexico. He says government microcredit programs aren’t helpful during economic crises.

“It is hard to imagine that a family can survive with these resources,” Badillo says. “Support, such as microcredits, can be a questionable policy because we are in a situation where companies and people cannot go out to work. It is difficult for them to accept a credit, and then it is more difficult to be able to pay it back, because the payment of this credit will depend on them being able to work.”

Badillo says women who trade on the street are especially vulnerable.

“The need to obtain resources can lead them to not respect the quarantine, and this puts them at risk of contagion,” Badillo says. “We must take into account that their work situation does not give them access to social security.”