Urbanization and finance in developing countries: marketization, institutionalization and internationalization of housing microfinance in Mexico

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The project seeks to examine processes and effects of marketization, institutionalization and internationalization of housing microfinance in Mexico. These processes currently result in expanded access to non-mortgage microloans for low-income households for purposes of renovation and remodeling of self-built homes. On the one hand, we ask how these processes evolve, how they are manifested and interrelated. On the other hand, we seek to assess the potential effects of these processes on self-organized building practices of low-income households. This results in a double focus on the institutions and mechanisms which link financial markets and the informal housing sector as well as on the everyday practices in which financial services are obtained and consumed by low-income households. The broad aim is to reflect on changes in the logic in which the financial sector is tied to urbanization, in the context of Mexico as a developing country.We approach the topic from two complementary perspectives: The macro-level analysis aims to evaluate the role and instruments of housing microfinance within federal, state, and local housing policies, the private and public actors in this market, and the targeted segments of population. This is operationalized through document analysis of legal, policy and industry documents and a series of expert interviews. The micro-level analysis seeks to understand potential consequences of expanding housing microfinance provision to low-income households by evaluating remodeling projects of first-time borrowers and the social implications of increased debt levels on households and communities. This is operationalized through a series of qualitative case studies of low-income communities located in the Mexico City Metropolitan Area and the coastal zone of the State of Quintana Roo. Case studies are based on in-depth interviews and focused ethnographic observations.With our analysis of Mexico, we seek to go beyond both the strong focus on mortgage markets and securitization and the broad limitation of analysis in the existing literature on financialization, which focuses heavily on US, UK and European cases. By drawing on urban social science literature and insights from development planning and development studies, the project promises insights in two important ways: First, it potentially contributes to international debates on financialization against the background of wider debates inspired by post-colonial approaches to urban and planning theory about whether and how concepts derived from European and US experiences can serve in analyzing Latin America. Second, it potentially allows to combine and contrast theoretical considerations with empirical data from a geographical, economic and cultural context that has until now been largely neglected in the international literature on financialization and the production of urban built environment.