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The "missing middle" of small businesses with Shamina Singh

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Mr. Martín is a third-generation entrepreneur who owns a business selling specialty products in Mexico City. As we visited his stall in the&nbsp;<a href="https://www.civico.com/lugar/mercado-martinez-de-la-torre-zona-mexico-1" rel="noopener noreferrer" target="_blank" style="font-size: 16px;">Mercado Martínez de la Torre</a>, he told us about the family tradition surrounding the business. After he earned his degree in mathematics and computer science, he made the decision so many others have made throughout the years — to take over the family business. But these days, family tradition doesn’t always have the same pull. While Mr. Martín wants his children to inherit the enterprise, they would rather pursue more modern lifestyles and their own careers.Mr. Martín, along with his brothers and uncles, manages six other stands, which makes them part of a vast population who depend on Mexico’s markets for their livelihoods. Because so many people work in markets, they’re of particular interest to Accion partner,&nbsp;<a href="https://www.civico.com/" rel="noopener noreferrer" target="_blank" style="font-size: 16px;">CÍVICO</a>. CÍVICO is a&nbsp;<a href="https://www.accion.org/how-one-platform-connects-cities-and-boosts-small-businesses/" rel="noopener noreferrer" target="_blank" style="font-size: 16px;">digital platform that connects small businesses and individuals</a>&nbsp;to their cities and to each other. Users can map and interact with local enterprises, and micro, small, and medium business owners can use the platform to access financial tools. For people who work in markets, this is often their first opportunity to use quality financial services and can make a real difference in modernizing the business.Mercado Martínez de la Torre is one of the 329 public markets in Mexico City, some of which are over 100 years old. These markets are considered centers of the Mexican economy, providing income for about&nbsp;<a href="https://www.sedeco.cdmx.gob.mx/comunicacion/nota/gcdmx-quiere-que-los-mercados-publicos-brillen" rel="noopener noreferrer" target="_blank" style="font-size: 16px;">280,000 families</a>, according to the Government of Mexico City. Different government initiatives have been introduced to organize, formalize, and develop these markets to improve how they function. Today, they still evoke the traditional way of carrying out business, the exchange of essential goods and consumer products, with a somewhat nostalgic cultural and social function that goes beyond strictly business.Most of these markets have a specific focus; the Mercado Martínez de la Torre specializes in basic household needs, while the&nbsp;<a href="https://www.civico.com/lugar/mercado-de-granaditas-mexico" rel="noopener noreferrer" target="_blank" style="font-size: 16px;">Mercado de Granaditas</a>&nbsp;mainly sells leather goods. In the latter, we had the opportunity to speak with Ms. Bertha, who sells handmade leather handbags. Ms. Bertha learned this trade from a very young age from her dad, whom she deeply admires and who ensured she would grow up to be self-sufficient and know the value of hard work. An estimated&nbsp;<a href="https://www.sedeco.cdmx.gob.mx/comunicacion/nota/mujeresinnovando-en-los-mercados-publicos" rel="noopener noreferrer" target="_blank" style="font-size: 16px;">70 percent of public market tenants are women</a>, and Ms. Bertha is proud to work among her fellow female business owners, stating that “we women are warriors, and we are the pillar of Mexican families.”&nbsp;

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Ms. Bertha shows off her handmade leather bags in Mercado de Granaditas&nbsp;&nbsp;As we spoke to business owners like Mr. Martín or Ms. Bertha, we learned about the different challenges that they face, such as finding someone trustworthy to help with daily business needs, growing sales in an increasingly competitive world, and in particular, dealing with the ways that technology is changing business. While technology can be tricky for traditional enterprises to navigate sometimes — it also offers opportunities. Customers are better informed and ready to purchase with digital payment methods, which they see as easier to use and more secure. People are also becoming interested in buying products online or using messaging applications such as WhatsApp to make orders, and merchants who know how to use digital platforms to promote themselves and enable sales can take advantage of these new channels.It’s unclear whether the markets as we know them today will disappear, but what is certain is that the way to do business and promote products is already changing and evolving. That is why, in collaboration with CÍVICO, Accion’s Global Advisory Solutions team has been interviewing these businesses to identify the main barriers they face. Supporting small business owners is crucial if we want to drive inclusive economic growth. We need to understand the different challenges they face today so we can work with CÍVICO to create financial products and services that meet their needs.&nbsp;Our initial interviews revealed two primary opportunities:<ul><li>In their search to diversify and attract new clients, entrepreneurs are very interested in new ways to promote their businesses through digital platforms</li><li>Business owners are increasingly open to accepting electronic payments through different systems (Clip, Sr. Pago, iZettle, etc.)</li></ul>Family-owned enterprises are steeped in tradition, but it’s clear that the modern world has a lot to offer them, too. These entrepreneurs can’t wait for the next generation to take over the business and modernize — these changes are happening right now. We’re hopeful we can use our findings to give people the tools they need so their businesses can continue to stand the test of time.This research is part of the&nbsp;<a href="https://www.accion.org/helping-small-businesses-and-communities-thrive-with-digital-financial-services" rel="noopener noreferrer" target="_blank" style="font-size: 16px;">partnership</a>&nbsp;between the Mastercard Center for Inclusive Growth and Accion that aims to give 10 million clients, including 4 million merchants, access to the necessary financial tools to run better, buy better, and sell better. To achieve this goal, this partnership will support a number of institutions across the world, with&nbsp;<a href="https://www.accion.org/helping-small-businesses-and-communities-thrive-with-digital-financial-services" rel="noopener noreferrer" target="_blank" style="font-size: 16px;">CÍVICO being one of our first collaborators</a>&nbsp;in Colombia and Mexico.&nbsp;Author: Maria Belen GarrettThis article was written with support from Leonardo Tibaquira, Juan Alberto Almonacid, and Gabriel Quiros Rubio.

CÍVICO is helping micro, small, and medium enterprises innovate so traditional family businesses can succeed in a changing world

The Faces Behind Mexico City's Mercados Públicos