Understanding the Informal Economy’s Impact on SMEs and the Economy
Micro, small, and medium-sized enterprises (SMEs) constitute 98.8% of the country’s economic units, yet most operate in the informal sector. Juan José Sierra Álvarez, president of Coparmex, emphasized the importance of understanding the reasons behind this informality before offering support.
“Employment in Mexico is sustained by informality, and that’s not good; it’s a brake on our country’s economy,” Sierra Álvarez stated during a press conference.
To decrease informal employment, the Coparmex president specified that business owners require incentives, such as deductibility of labor benefits, to view formalization as a growth avenue.
We need to incentivize them. We are working with the Mexican Banking Association (ABM) to design strategies and incentivize them. Mexico needs a tax incentives route to promote and support SMEs,”
Crece tu negocio Platform to be Powered by Artificial Intelligence
For the upcoming International Innovation and Entrepreneurship Fair (FIIE), organized by Coparmex, approximately 30,000 attendees are expected. They will have access to various conferences, networking spaces, and incubation programs.
Moreover, the FIIE will benefit from the Crece mi negocio digital platform, which integrates financing tools, government procedures, and digitalization tailored to SMEs.
In this context, Juan José Sierra Álvarez announced that during the event’s days, they will launch the AI-powered platform.
Furthermore, with the recent agreement between Coparmex and ABM, more banks are expected to join in the future to facilitate access to credit for SMEs.
“There are about 14 banks specializing in SMEs. The idea is to invite them and, through this agreement, facilitate credit access for SMEs,” Sierra Álvarez mentioned.
Additionally, Coparmex envisions the platform collaborating with private and public institutions like the Mexican Social Security Institute (IMSS), Infonavit, and others that promote SME growth.
It’s proven that if an SME is trained, provided with financing, and connected to supply chains, it can be five times more productive and generate four times more employment”.
Key Questions and Answers
- What percentage of economic units in Mexico are SMEs? 98.8%
- How does informality affect Mexico’s economy? It acts as a brake, hindering overall growth.
- What incentives do SMEs need to formalize? Deductibility of labor benefits.
- What is the purpose of the Crece tu negocio platform? To provide financing tools, government procedures, and digitalization for SMEs.
- What is the goal of the Coparmex-ABM agreement? To facilitate credit access for SMEs through more bank participation.
- Which institutions will collaborate with the Crece tu negocio platform? Private and public institutions promoting SME growth, such as IMSS and Infonavit.
