Caja Popular Mexicana is gaining force as a smart alternative to traditional banking, reaching markets formerly inaccessible to financial institutions and treating its clients as owners
Around the world, co-operatives have presented people with a viable alternative to traditional business structures for more than 150 years. In Great Britain, the International Co-operative Alliance (ICA) was founded at the end of the 19th century to unite, support and represent co-operatives worldwide. Membership has exceeded 260 member organizations from 96 countries, representing nearly every economic sector, and almost 1 billion people participate in a co-operative of some kind.
Mexico is represented in ICA by four co-operatives, one of which is Caja Popular Mexicana
), a medium-sized financial institution whose CEO, Ramon Imperial Zuñiga, is Vice-President of ICA representing all the North and South America region.
“Co-operativism has transcended and I think it is generating a lot of good and wellbeing for a lot of people,” says Mr. Imperial of the global movement that has succeeded in all political systems.
“Our products and services cater to the middle and lower classes, especially to those who have no access to financial services.”
Ramon Imperial Zuñiga, CEO of Caja Popular Mexicana
CPM is the result of a fusion of 65 small savings and loans that, 18 years ago, decided to take an important step forward. “Sixty-five co-operatives simultaneously agreed to renounce all that they had created to form a new co-operative called Caja Popular Mexicana. By doing this, they knew they could generate economies of scale, improve management, and boost growth, while at the same time creating better benefits for the people,” says Mr. Imperial.
At the time, the number of members of these 65 co-operatives totaled 150,000. Today, nearly 2 million people are CPM members, or “owners”, as the CEO calls them. He says, “In a co-operative, all the people who participate and use the savings and loans services, or the financial services in general, have to be members and as members, they become owners.”
Ultimately, all decisions are made by democratically elected representatives from CPM’s branches.
While CPM members enjoy the same competitive rates that a normal bank offers, in some cases the advantages are even greater, according to Mr. Imperial. “I would say that on a general level, we are very competitive. For example, in the savings area, we pay market rates, and actually, if at all possible, we pay a bit more than the average in the Mexican financial system. In terms of credit, as well. I would say we are one of the institutions that charges the lowest rates in the market,” he says.
In describing CPM, Mr. Imperial explicitly explains that his is not a bank, but rather a financial institution that is capable of reaching people that regular banks cannot.
“Our products and services cater to the middle and lower classes, especially to those who have no access to financial services,” he says. “We also have to be creative in designing our savings products in order to ensure that they are simple to use and understand. It has to be easy to open an account with us, there are fewer procedures and the requirements are less strict.”
Despite its alternative structure, CPM has grown successfully over the years and competes in size with commercial banks; indeed, it is ranked among the 15 largest financial institutions in Mexico today, with 430 branches in 22 states.
“I believe we are a serious and realistic alternative since we already have a presence in many places where commercial banking does not. I think that if we further develop as a co-operative, we will enable our members to grow and the country to develop, and ultimately, that is in everyone’s best interest,” says Mr. Imperial.