IFC invests $2.5M in Mexican distribution firm Mi Tienda

Microfinance Focus, Jan. 29, 2010: IFC, the World Bank’s investment arm, has signed a long-term agreement with Sistema Integral de Abasto Rural, SA CV (Mi Tienda) to help the Mexican distribution company, known as Mi Tienda, expand its operations.

IFC’s $2.5 million investment will help create more than 900 direct jobs and sustain the livelihoods of more than 25,000 rural retail store owners, most of whom are women.

The proposed project consists of the expansion of Mi Tienda through the development of 36 distribution centers. The centers will target rural retail stores located in 14,740 villages with average populations of less than 5,000 inhabitants, reaching a total of 4.7 million Mexican households.  IFC will provide long- term equity financing to support the company’s expansion and affiliation program.

The project is expected to have a high development impact on micro, small, and medium enterprises  in the rural parts of Mexico.  It will contribute to the development of rural retail stores by expanding the assortment of products and providing new store layouts.

“This innovative retail project has an immense potential for a high development impact by reaching out to the rural population and enhancing access to finance for women MSME entrepreneurs,” said Dimitris Tsitsiragos, IFC Director for Global Manufacturing and Services.

The affiliation program will foster private sector development by providing training in inventory management, accounting, and working capital management.  It also will reduce working capital needs and provide access to credit by offering payment facilities to the stores.  While catering to the basic  needs of the population such as food and consumer goods, Mi Tienda’s distribution system also will also provide a platform for services such as insurance, payment of utility bills, branchless banking, and micro-credit.

Jose Ignacio Avalos, Mi Tienda’s founder , said, “We value highly  IFC being part of the Mi Tienda project.  IFC’s investment will help us generate a systemic change in Mexican retailing, resulting in improved services and accesibility to a wider range of products at affordable prices for rural communities: the underserved  populations.”

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