Agua Florida Community Savings in Agua Florida, Ixmiquilpan, Hidalgo, Mexico

Pena-Trejo, Juan
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Southern New Hampshire University
As stated in the thesis project, "Agua Florida Community Savings (AFCS) is a non profit organization based in Agua Florida, Ixmiquilpan, Hidalgo, Mexico. This organization will help residents of Agua Florida who work in the United States to transfer their money to family members in Mexico at reasonable cost than sending money through conventional financial institutions. AFCS is committed to address the credit needs of the community of Agua Florida by making small and short term loans, helping the community finance small community projects, beginning compensating the community leaders and to start changing the political structure in the long run. Agua Florida is a small village located in the high mountains of Hidalgo, Mexico. It is 85 miles northeast of Mexico City. The nearest city is Ixmiquilpan, Hidalgo which is about 30 miles away, where every resident of the area goes to shop and to sell their local products. The population of Agua Florida is about 350 residents. The majority of the young people have immigrated to work in the United States. Currently there are about 30 Agua Florida residents working across the United States, 60 percent are men over 18 years old. Residents have immigrated to the United States due to the lack of jobs and resources in the area. Prior to the 80s, the residents supported themselves by farming their land and making hand-made wooden crafts. The population has grown and resources have became scarce. Most residents depend on income from outside, especially from the United States. Most Agua Florida residents working in the United States use Western Union and MoneyGram to transfer their money to family members in Agua Florida. They spend an average of 15 percent in fees to transfer their money. Western Union charges $15.00 to transfer $100.00 and when the money is withdrawn in Mexico, Western Union pays far less than the exchange rate. In other words, to send money through Western Union, the sender pays twice for the service. The aggregate amount of money that is paid for transfer fees is significant and is something that the community can benefit from. Agua Florida residents spend about $150.00 dollar per month in transfer fees. This amount is one month's income for a resident of Agua Florida working in the community. The community can use the money which is being paid in fees for community projects, beginning with the creation of a salary for the community selectman. Currently, appointed selectmen work voluntarily for the community for a year. The community selectmen finances community projects by looking for government funds and collecting community taxes. The Agua Florida Community Savings (AFCS) is an alternative method to transfer money to family members in Agua Florida and the fee for the service is competitive compared to Western Union and MoneyGram. The task of AFCS is to help residents working in the United States to reduce fees when they transfer money and to generate revenue for community projects. The Agua Florida Community Savings is managed by a group of seven people from Agua Florida. Four members are working in the United States and two live in the community. The seven officers are elected every two years. The government structure of the AFCS allows every community member to participate in decision making. Agua Florida Community Savings (AFCS) will raise funds from the Agua Florida residents working in the United States. AFCS needs to raise a minimum of $500.00 to start offering money. Agua Florida Community Savings needs to transfer large amounts of money from one bank account to another bank account in Mexico to significantly reduce transaction fees. Since AFCS would not transfer large amounts of money, it will use a credit card in the beginning. The cost to use a credit card is relatively less than using Western Union. To transfer $100.00, it cost approximately $9.00 including annual interest. The money will transfer in the following steps. Four people are involved in the process. The "sender", the person who sends money to Mexico, will send the money to an AFCS representative in the United States. The AFCS representative in Mexico withdraws money from a Mexican bank in Ixmiquilpan and she or he gives the money to the "receiver." The AFCS representative in the United States will pay the credit card bill at the same day to avoid high interest. Any profit earned from AFCS will be used for community projects and to start paying community leaders.AFCS has advanced slowly in meeting its projected goals by the end of2001. AFCS organizers had projected raising $1,500.00 in donations and starting to offer the service of transferring money. So far, we have failed to make short term loans or start transferring money. It was difficult to raise enough funds due to instability of the residents working in the United States. The AFCS organizers regularly looked for alternatives to raising funds among the community members but were unable to succeed. It became more difficult to raise funds when the Enduring Freedom War began. Many community members working in the States returned to Mexico, ending their income source and thus making them unable to contribute to the project. Despite unexpected events, AFCS organizers are optimistic for success with the project but it will take more time than expected. The organizers expect AFCS to start operating at full steam by the end of April 2001." (Library-derived description)