Tackling women’s employment and digital financial inclusion in one

Lessons from a fintech in Mexico

The fintech MeXCo Soluciones was founded to address two challenges in Mexico.

Firstly, the lack of inclusion in fintech, where the majority of products are designed with young, urban men in mind. While financial systems are becoming more and more digital, this shift is leaving behind huge sections of society, including large numbers of women. If equity isn’t addressed directly, digitalisation risks increasing existing inequalities.

At the same time, women in Mexico and around the world, especially those over 40, are also excluded from the labour market. They struggle to join or re-join the workforce and are overwhelmingly represented in informal and low-paid work.

MeXCo’s founder, Barbara Magnoni, spoke on the Feminist Finance Podcast about how the fintech addresses these two challenges simultaneously.

A unique salesforce

MeXCo hires teams of women over the age of 40 from low-income communities in Mexico to sell products on behalf of financial institutions. Through this unique sales team, it focuses on reaching small business owners in Mexico, particularly those not reached by traditional providers. Its most important partnership to date has been with Banco Santander and fintech ID Mission, through which MeXCo sells point-of-sale tablets to shops and other small businesses in low-income neighborhoods. These merchants in turn sign up their customers to Santander’s platform, which allows them to pay for goods and services digitally.

MeXCo trains its recruits in sales techniques and to understand the fintech products that they sell. The salesforce then sells the product and provides customers with a comprehensive and trusted onboarding process. MeXCo has found that customers of all ages are more willing to open up to these older, trusted women about their concerns with the technology and more willing to learn from a hands-on process with someone from their own community.

What is important to MeXCo is not only providing a different experience for its clients, but also creating a different working culture for the women it recruits, based on a collaborative model that leverages female solidarity. Creating this culture is hard work. Barbara explains, “it’s not easy for people who have lived in a really rough environment where it’s every man or woman for themselves. We need to show by example what that culture looks like and work really hard to consistently promote that model. We have to show that we put collaboration and solidarity above everything else — above winning, above succeeding — and provide people with the support they need to know that we have their backs. But that’s enormously rewarding and it works.”

The company has grown rapidly and now has a sales force of around 25 people working across four regions in Mexico, in areas ranging from urban to semi-rural. Its collaboration with Santander has reached almost 2,000 small businesses, who have in turn signed up thousands of their customers to the platform.

Could this model work for insurance?

MeXCo has not yet distributed insurance products, but the team plans to test insurance distribution this year. The model offers three potential advantages for insurance distribution:

1. Overcoming distrust: Distrust of insurers is rife in Mexico and difficult to overcome through purely digital solutions. Face-to-face sales with respected older women might just provide an anecdote. MeXCo has found that its salesforce can overcome distrust by starting from a point of empathy around past bad experiences with financial services, and providing an explanation of the advantages of a product and the reasons MeXCo has chosen to work with a trust a certain provider.

2. Reduced costs through sales of several product types: It can be hard to justify the costs of an exclusive agent network for insurance sales. Insurers have therefore looked to leverage existing agent networks, but face challenges in finding a network that matches the sales style and intended customers of an insurance product. MeXCo offers the reduced costs of an agent network already selling a range of other related products, and is already targeting the kind of small business owners that are attractive clients for insurers. MeXCo’s salesforce typically spends time explaining products in detail to customers and gaining trust — a vital factor for insurance sales and difficult to achieve in agent networks that are accustomed to rapid sales or well-known consumer goods or services.

3. Customer insights: MeXCo’s salesforce collect both standardised geo-located demographic data on their customers and qualitative information on their preferences and needs. With the limited experience in providing voluntary insurance in Mexico, this information could provide valuable insights to help insurance partners design and refine products.

Many questions would still need to be addressed to leverage a sales network like this for insurance distribution, particularly how small, regular insurance premium payments could be collected. However, it offers a compelling possibility for insurers to reach groups, like women entrepreneurs and small businesses, which even insurers find hard to reach.

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You can find out more on MeXCo’s website or listen to an interview with Barbara Magnoni on the Feminist Finance Podcast.

The Feminist Finance Podcast brings together leaders in finance to define a feminist future for the financial system.

Listen to further episodes at feminist.finance or subscribe to the podcast on Apple Podcasts or Spotify.

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