Fonacot’s Low Payroll Credit Rates are Attracting New Clients Daily

Fonacot’s 50th Anniversary: How Lower Interest Rates, Increased Loans and Technological Advancements Are Helping Mexican Workers Achieve Financial Freedom

In an interview with Salvador Gazca Herrera, general commercial coordinator of Fonacot, the objectives of the institution were discussed on the occasion of its 50th anniversary. Herrera highlighted that since the beginning of the current administration, interest rates on payroll loans offered by Fonacot have decreased almost 20 percentage points, resulting in an increase in clients and financing amounts. This has allowed Fonacot to attract more clients and place a greater amount of financing, which has reduced the rate of the total annual cost of payroll financing for workers—from 40 percent to 25.5 percent today.

Herrera also mentioned that one of Fonacot’s current objectives is to dispel the notion that it is only an institution for buying furniture. He noted that there has been a significant decrease in the total cost of credit by 18.2 percentage points, even at a time when the economic cycle is marked by high reference rates maintained by the Bank of Mexico (BdeM). The growth of credit by Fonacot has been evenly spread throughout the country, and the credit is not just for buying furniture. According to Herrera, 59 percent of the loans are granted to people whose income does not exceed two minimum wages.

Furthermore, Herrera announced that a new application with more features will be available in one month to address the needs of clients who already have a loan. Currently, 70 percent of clients already have a loan while 30 percent are new. An increase in technology investments has allowed each operator at Fonacot to increase their daily placement from 13 to 17 loans. Overall, Herrera emphasized that Fonacot’s goal is to provide accessible financing options for workers across Mexico and help them achieve their financial goals.

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