Mexico City Government Will Grant MX$2.4 Billion FONDESO Credits
Underdeveloped zones in the Mexico City metropolitan area will receive Social Development Fund (FONDESO) credits to enhance their businesses and auto-employment capabilities, as the labor market is expected to slow-down in 1Q23.
The Mexico City government will grant MX$500 million (US$26.6 million) in FONDESO credits in 2023. Mayor Claudia Sheinbaum highlights that the city seeks to strengthen the neighborhoods furthest from the city center, thus granting these social development funds to Tlahuac, Milpa Alta, and Xochimilco.
The government explained that from December 2018 to December 2022, FONDESO granted MX$1.8 billion (US$95.9 million). With the MX$500 million (US$26.6 million) forecasted for 2023, the total amount will rise to MX$2.4 billion (US$127 million). Those funds will be allocated to promote entrepreneurship in micro-enterprises and productive activities of self-employment, explained the Mexico City government via a press release.
The credits aim to pursue two major goals in 2023: support the neighborhoods furthest from the city center and provide guidance in favor of women. The city government stressed that only 68% of the total support is granted for women and aims to elevate the figure to 75%.
“During the past administration, FONDESO delivered only MX$612 million (US$32.6 million), an amount that almost tripled in the period of the current government. In addition, to promote economic reactivation, an interest rate of 0% is issued for MX$10,000 loans (US$533), while for larger loans, the rate will be 6%,” explains the Mexico City government.
The government also highlighted that it has already trained 301,117 people in person and remotely in neuromarketing, internet sales, social networks, human capital and other areas. During the past administration, 90,000 people were trained between 2012-2018.
Nevertheless, job growth is expected to slow down during 1Q23, which will likely affect Mexico’s labor force and bargaining power. Low-skilled laborers will face major challenges with limited growth opportunities. The slowdown is expected to increase informal employment in the country. Highly-skilled, cost-intensive and technology-trained talent is likely to escape the market as workers aim to change employers for greater compensation and increased flexibility, as reported by MBN.