Gisela Aglaé Orozco Robles
Marcela Valencia
Juan Pablo Velasco Flores
Gerardo Mendoza
Jorge Arturo Corona
EGADE Business School Tecnologico de Monterrey
Consuelo Garcia-de-la-torre
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“Patrimonio Hoy” is a program created by CEMEX, a global construction materials manufacturer, that provides financial and technical assistance for self-builders to produce a safe and functional living space. The program helps low-income families build homes. It provides the possibility of growth to its clients and encourages people in the communities to supply services by promoting the program and contracting material suppliers to include them in this cycle of benefits to their community.
As of 2017, “Patrimonio Hoy” has helped approximately 550,000 families in Mexico build a home. More than 2.5 million people now have better living conditions and a greater chance to transform their lives and have a better future.
“Patrimonio Hoy” has been recognized worldwide, receiving awards such as the World Business Award in support of the Millennium Development Goals (2006), and the UN-Habitat Business Award for Best Practices in Solutions for an Affordable Home (2009). In addition, it has been used as a successful business case in institutions such as Harvard University, Northwestern University, the University of Michigan and Stanford University.
CEMEX has created a program dedicated to consult with low-resource builders to provide them with counseling and material selection. This program, “Patrimonio Hoy” (Spanish for “your asset today”) provides financial and technical assistance for self-builders to produce a safe and functional living space.
The main innovation created by “Patrimonio Hoy” is how it cracks the main obstacle for construction: the costs. CEMEX’s program tackles this issue by breaking it into several steps:
The innovation enacted by CEMEX ensures that the project will be planned and executed on time, which is a substantial difference from the common self-construction project. This also helps CEMEX build an inclusive business model where the project helps the local community, creates significant social impact and generates revenue for the company to sustain the model.
It was during 1998, after Mexico’s economic crisis, when CEMEX realized that 30% to 40% of cement sack consumption came from large users. They saw a business opportunity and quickly put together a multidisciplinary team to start working on defining the business model that would have direct contact with self-builders. The team started by defining a product for this market, such as smaller sack sizes.
After performing a thorough analysis, they realized there were some barriers that were preventing self-builders from buying their cement sacks directly from CEMEX, such as:
These small users tend to lack adequate storage space, so the materials can be spoiled during the rainy season. They also face a lot of thefts due to lack of proper facilities with security, and they waste huge amounts of materials due to improper material management and planning.
As a result, CEMEX started to design an integral solution for this market niche. For the financial problem, they were inspired by the concept of “tandas," an informal way to save money in Mexico.
With “tandas," each person in a group agrees to pay a monthly or bimonthly amount of money to an organizer. Then, each month, there is a raffle which determines who gets the projected pot of money. This goes on every month. In this way, any person can save and if lucky, can get the money they need before all the payments are done.
Although the concept has evolved since 2007, the idea of having a group of people committed to save together to get the resources and material to build or remodel their houses was the base of the business model. This included full technical support and material management from CEMEX’s facilities.
After 19 years, “Patrimonio Hoy” is an inclusive business that has transformed the lives of more than 2.5 million people by solving their construction needs for rooms, houses, bathrooms or other work in the homes of more than 550,000 families. They have been built through credits exceeding $295 million with a timely payment rate of 99%. Today, the program exists in five Latin American countries: Mexico, the Dominican Republic, Nicaragua, Colombia and Costa Rica, always with a social focus for the development of the family and the improvement of their quality of life.
This program is customized to each participant’s needs and financial capacity. Those interested in participating must have land on which to build and receive comprehensive advice about their home. The architect will raise all the relevant information regarding the construction needs and the family's payment capacity and will be presented with a solution.
Through a savings and credit system without requirements and with a comfortable fixed weekly or bimonthly payment scheme, the family manages to transform their house in a planned way. The result is a self-built residential unit of 10 to 12 square meters, depending on the construction need. The financing of the program is adapted to the needs of the clients. “Patrimonio Hoy” can give terms and larger amounts as well as construction services until the project is finished.
Since the beginning of the construction project, “Patrimonio Hoy” offers integral consulting services which begin with the analysis of four important factors for the development of the construction project:
1. What needs to be built? They help prioritize the needs in the home or business through a direct survey on the site.
2. How much of the users income can be allocated to construction? They analyze the income and expenses to identify how much can be spent on the construction project.
3. How to carry out the construction project? Home building can be complex. They determine if the user is a self-builder and whether that person will need workforce or other help.
4. When does the user want the project completed? They design an implementation schedule to help the builder go at their own pace.
“Patrimonio Hoy” has been recognized worldwide, receiving awards such as the World Business Award in support of the Millennium Development Goals (2006), and the UN-Habitat Business Award for Best Practices in Solutions for an Affordable Home (2009). In addition, it has been used as a successful business case in institutions such as Harvard University, Northwestern University, the University of Michigan and Stanford University.
“Patrimonio Hoy” is part of CEMEX, a global construction materials company that offers high quality products and reliable services to clients and communities in more than 50 countries. CEMEX has a rich history of improving the well-being of those it provides services through innovative construction solutions, efficiency gains and efforts to promote a sustainable future.
"Patrimonio Hoy" is described as an inclusive and profitable business, although it may not be a very high income business. Still, it generates profits and fulfills its primary objective to generate an internationally positioned company capable of creating value in the world through the support they provide to the community.
The program helps the community build homes by providing the possibility of growth to its clients. It encourages people in the communities to supply services by promoting the program and contracting material suppliers to include them in this cycle of benefits to their community.
CEMEX’s project is also an initiative to generate utilities to the company based on recent studies of Mexican demographics. Nearly 46.2% of people are considered poor and this percentage shows there is a market to be served. While “Patrimonio Hoy” offers the society an opportunity to get a better place to live, it also gives the company an opportunity to increase profits due to the large population it can help get a decent home
Before CEMEX started the “Patrimonio Hoy” program, CEMEX’s informal market participation was reduced to sales through local retailers. Nowadays the participation in “Patrimonio Hoy” guarantees CEMEX brand loyalty and high reputation within low-income communities. In 2004 the program broke even and fulfilled its objective to be self sustainable. Financially, over the past few years, CEMEX has eared $6.5 million and is now selling 60 thousand tons of cement per year.
One of the most important benefits of “Patrimonio Hoy” is that it gives low-income urban and suburban communities the opportunity to build decent houses by providing building materials in a microfinance scheme allowing them to pay for the products over time. It offers expert technical advice and architectural guidance, and provides material storage and delivery to customers.
These advantages can easily be translated into a better lifestyle and poverty reduction for customers and their families who are mostly excluded from the traditional financial sector and cannot afford a construction project. Also, by having expert assistance, customers can build their home in a way that meets their needs and increases its property value, while saving money through reduced material waste.
Another benefit of the program is that it activates the local economy by generating job opportunities. Instead of hiring people, “Patrimonio Hoy” builds a community-based network of promoters, material suppliers and transporters. Promoters, who are usually women, receive education and training that allows them to create an income based on commissions for every customer they bring in.
As of 2017, “Patrimonio Hoy” has helped approximately 550,000 families in Mexico to build a home where more than 2.5 million people now have better living conditions and a greater chance to transform their lives and have a better future.
Sustainable Development Goals:
“Patrimonio Hoy” positively affects the following sustainable development goals:
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