Greetings from Zacatecas, capital city of the state of Zacatecas, Mexico!

I have spent the better part of the week camped out in this fine colonial city to continue to bring ADMIC journal updates to Kiva lenders. Yesterday, I met Maria de la Luz and learned about her family’s potato chip making business.

This should have been a fantastic journal update for some Kiva lender but sometimes the great work of a microfinance institution (mfi) like Mexico’s ADMIC is not funded by Kiva dollars.  As I am sure has happened to other fellows, the microfinance partner staff are so excited to introduce you to one of their most interesting and industrious clients that you are swept up in the moment only to return to your laptop after lots of walking, two buses and a taxi to discover (gasp!) of the 18 Maria de la Luz’s using ADMIC/Kiva funds for their business, the Maria de la Luz who makes potato chips in Zacatecas is not one of them. So in honor of all of ADMIC’s work, this a Kiva fellows blog entry. Not to mention I will take advantage of more room for pictures to share the story.

Six years ago Maria de la Luz, her parents and her brother began a potato chip making business. Her brother had worked for another person making the chips and convinced the family to get involved. The brother is no longer a part of the business but Maria de la Luz and her parents are still doing the daily labor of making the chips.  For those of you have traveled in Mexico, you have likely seen folks selling chips in clear brand-free plastic bags, on the side of the road, in front of schools, on the bus, in the market. I always just thought folks bought huge bags of Lay’s and broke them down into smaller bags for re-sale.  Maybe that happens, but I may have just been missing some of the finest potato chips Mexico has to offer.

Maria de la Luz and her family buy potatoes by the ton- typically six tons- to last them just about two months. The process is reasonably simple using only potatoes, oil and salt, but incredibly labor intensive. It sounds like simple but check out these pictures to get an idea of the work.

Every morning her parents are up by 7am cleaning the potatoes and removing the skins. I got there in the afternoon, so missed this step. Here are the potatoes they keep for the process.

the potatoes awaiting...maybe another two weeks worth

The potatoes are put into a slicer for…slicing. The pieces fall into a vat where they are cleaned.

From there the slices are poured into a huge vat of boiling oil presided over by her mom. The oil is changed a couple times a day to ensure it is fresh and the flavor consistent.  When the color is right, Maria de la Luz’s mom sweeps them out of the fryer and sets them aside for cooling, a dash of salt and ole! potato chips!

scooping the potatoes from the fryer

Maria de la Luz then takes the boxes to the shop and bags them up for distribution.

I hope the scrappy pics do some justice to the work that I got to see. This family barely breaks even if the cost of potatoes or oil gets to high. They appreciate the loans from ADMIC. It has allowed them to purchase potatoes when times are rough and the equipment they needed to get the business started. ADMIC has been providing microloans in Mexico for over thirty years. They have branch offices throughout the country. ADMIC is one of Kiva’s long standing partners for the last 2.5 years.

Best- Megan

The sale of used clothing is one of the top micro-businesses in northern Mexico. The transport of used items across the US/Mexico border keeps some families fed and clothed.

There are those who dabble in the market and may have just a few items. The items might be for sale in front of their house on a clothesline or a blanket on the ground. The individual may have another business going on- a store, food sales or the like. Their items come from a range of sources- maybe their children outgrew it, maybe they need the cash more than the item, maybe they saw a deal and are now looking for some extra profit.

There are women- used clothing sales tend to be women- who have a greater commitment to the industry. They work the markets. Communities throughout Mexico, typically have their market days. Tuesday and Friday mornings could be in one location. Maybe Wednesday evenings are held in another spot. Saturdays they might head to another town altogether. Typically there is a registration fee to be paid to the group running the market of $M100pesos depending on the size of your stand. Some markets are more informal with fees paid each time a table is erected. These women have been putting up stands in the same markets for years. In addition to the casual customer, they have a loyal client base who has come to trust their selections.

Some women may purchase items in “pacas” or bulk. They may buy a hundred pounds or so sight unseen for the markets. With the average American tossing 68lbs a year, there are lots of clothes to be had. Pacas come rated by quality that also varies the price. Items that were discontinued or otherwise never worn receive the highest rating. Brand names- like Levi’s or Hilfiger- in good condition also can increase the cost of a paca.

The final stage is the woman who invests in a store front. She has a greater grasp of the small business market. Typically she can more quickly engage in a more advanced discussion about earnings vs operational costs beyond what is in the cash box. Some refuse to buy in paca. They don’t like putting their resources into this grab bag approach of items unseen. They prefer to cross the border and select item by item what they are going to take for sales back home.

Monterrey, Nuevo Leon is a mere two hours from the Texas border. Shopping across the border is so common that there is even a verb “McAlleando” used when somone is off to McAllen, Texas shopping. Although this is typically used in reference to the wealthier families of Monterrey who go to the malls in Texas in the same way that someone from Nashville might go shopping in Atlanta.

Used clothing venders might some may head to the state of Guanajuato, the most enterprising sellers of used clothing travel to the border markets or cross the border into Texas.  The Texas market was particularly lucrative back in the early fall when it was $10pesos to the $1. We are currently closer to $14pesos to the $1- that takes a huge bite out of a small profit margin. Before the currency fluctuation, people claimed they could make double. Buy a shirt used in the US for $2 and sell it for $4. The more experienced sellers talk about the market like a long term investor about his portfolio. There are good times and bad. These are some of the bad times.

Back home, items collected by local charities, but not deemed worthy of local resale are boxed up and either sold directly in lots at stores or even auction style at rates ranging from 37cents to 55cents a pound. Many of the items are taken to market with their original Goodwill or Salvation Army tags. By one estimate 50% of donated clothing is sold back to the same workers who made them.

Typically those who cross the border for clothing sales have documentation. Following a rigorous application process that centers around current employment and a vague assessment of your likelihood of returning to Mexico, a ten year visa can be granted. These folks cross the border to bring items back in for resale. The Mexican government has laws against the import of used clothing for resale. The number of items is vague. The customs agent tries to establish a sufficient number of items for the length of your stay in Mexico. Anything else can be heavily taxed.

The government believes the import of such large quantities of used clothing is hurting local manufacturing. The government hasn’t necessarily acknowledged the importance of cheap clothing to poor families. An quick look at the Sears at Monterrey’s Liverpool Mall is a good example. For the most part the items have approximately the same prices as any Sears back home. Same can be said for the Palacio de Hierro, a high end mall in Latin America’s swankiest zip code, San Pedro. This mall targets family incomes of $250,000 and higher- that’s dollars. A shirt for $1.50 or shoes for $3 can go along way to stretch the meager earnings- items not available at Liverpool or Palacio de Hierro.