Company administered program makes consumer credit for Mexican workers within laborers reach.

The Fondo Nacional para el Consumo de los Trabajadores, or FONACOT, was created on May 2, 1974 by a presidential decree. FONACOT is a financial institution created by Mexico’s central government for the purpose of providing access to consumer credit for Mexican workers needed to purchase essential durable goods and services.

The goal of the program is to enable minimum-wage laborers in Mexico to improve their material situation by giving them the ability to obtain credit at reasonable rates. FONACOT is subject to the most stringent of banking oversight, and requirements are overseen by the National Banking and Securities Commission (CNBV). In order to guarantee transparency and fairness, the institution also reports to the Superior Audit Office and is audited by various securities rating agencies, brokers, and investors.

How FONACOT works

Credit is extended to enrolled employees via two methods: pre-paid credit cards and cash deposits. When a purchaser requires credit assistance through the program, the money is loaded onto a virtual account and credit card within three days of the request. Alternatively, the purchaser may have the money deposited directly into his or her bank account within three days. Although FONACOT is not a benefit that is mandated by the federal government, companies often choose to administer the program through their finance departments to provide consumer credit for Mexican workers as a means by which to discourage turnover, an bolster employee retention.

Interest is usually based on the lowest available rate per the current market, and purchasers typically have up to six months to pay back any loans taken. Conveniently, through employers that participate in FONACOT, the program offers payroll deduction for all or part of the payback process to make repayment simple and painless. Qualifying laborers in Mexico may be eligible for loans equivalent to as much as two months of their salary.

Enrollment to receive consumer credit for Mexican workers can be done on-line. Once an application is submitted, the process proceeds with a follow-up consultation with a loan specialist. The specialist determines the terms of the loan based on the payment schedule, amount loaned, etc. The money is then transferred in just a matter of days. Workers that are recipients of FONACOT credit are then able to spend this money on virtually any consumer needs from automobiles to notary fees to home remodeling.

Requirements to join

Corporate membership is open to any and all private companies, states, municipalities, agencies, and public entities wishing to enroll their employees in the program. In order to apply as a Job Center (an employer), the following criteria must be met:

1. In business for at least two years with at least eight employees OR in business for at least ten years with at least three employees;
2. Subject to any of Labor Regulations, paragraphs “A” and “B” of Article 123 of the Mexican Constitution and also provided for in Article 8 of the Institute of National Fund for Workers Consumption Act;
3. Entered into the social security system for workers enrolled as IMSS, ISSSTE, or other appropriate status.

Corporations may also be required to submit documentation, including but not limited to:

  • Incorporation documents for the corporation registered in the Public Registry of Commerce
  • Power of Attorney granted to current legal representative of the applicant company

Companies or individuals with questions concerning FONACOT and its administration are invited to contact the author: