Government Loans Include Taxi Drivers, Waiters and Market Workers

President Andrés Manuel López Obrador has said that over 100,000 low interest loans will be given to taxi drivers, waiters and market workers in Mexico City only, El Financiero reports. The president made the remarks during his daily morning meeting explaining that the credit lines that had originally been discussed on May 21, had been expanded.

“A new line of credit from the National Fund for Workers’ Consumption Institute (FONACOT) will also be announced. It was a commitment and we are considering taxi drivers and waiters (for inclusion),” El Financiero reports. FONACOT credits are delivered directly to bank accounts. Among the benefits are its interest rates that are “lower than the market,” says the FONACOT website.

The credit expansion links to similar loans that the government has provided to those sectors hit by the COVID-19 pandemic. On May 13, independent workers were given access to credit through the government initiative “Crédito Solidario a la Palabra” (Solidarity Credit of Trust) through IMSS. The loans of up to MX$25,000 (US$1,118) were to help MSMEs during the COVID-19 pandemic, reports Animal Politico.

The decision to grant more credit lines comes after taxi drivers and representative unions in Mexico City have been calling for support. The lockdown measures that have been put in place in the capital, the country’s hardest hit region, have drastically reduced the number of customers for taxi drivers. Yesterday, taxi drivers called off a protest due to take place in the capital after hearing that the government would be expanding its credit line.

Other avenues of financial aid are being suggested for people who have lost their jobs as a result of the virus. President López Obrador’s has said that COVID-19 would cost 1 million jobs, while the National Council for the Evaluation of Social Development Policy (CONEVAL) has forecast 9 million Mexicans will fall into poverty as a result of the crisis.

Alejandra Macías, of the Center for Budgetary Economic Research (CIEP), told El Economista that there was a cushion of 2 percent of GDP that could be offered as financial aid to support individuals in lieu of a strong welfare system. Among CIEP’s proposals for financial support is the transfer of MX$1,500 (US$66) to every Mexican over the age of 18. This would cost MX$396 billion (US$17.68 billion), representing 1.5 percent of the country’s GDP.