Background on ABM and its Relevance
The Asociación de Bancos de México (ABM) is a crucial organization representing the interests of Mexico’s banking sector. With Julio Carranza, the outgoing president, at the helm, ABM aims to bolster support for micro, small, and medium-sized enterprises (Mexican SMEs) that generate eight out of ten jobs in the country.
The 88th Bancaria Convention and the Plan México
During the 88th Bancaria Convention, ABM will sign an agreement with the government to enhance access to formal credit for Mexican SMEs. This initiative is part of Plan México, which aims to ensure that at least 30% of these businesses receive financing by 2030, up from the current 24%. Carranza believes that this goal is achievable within five years, provided the government and development banks collaborate on expanding credit guarantee programs.
Challenges Faced by Mexican SMEs
Carranza acknowledges that many Mexican SMEs lack formal credit histories, operate informally, or are unaware of available financing options. With over three million businesses operating in informality, there’s a pressing need for support to encourage formalization and growth.
Importance of Information and Credit Guarantee Programs
Carranza emphasizes that without comprehensive information, assessing risk for SMEs becomes challenging. He advocates for government and bank collaboration to provide substantial credit guarantees (80-90%) during the first year of financing. These guarantees would gradually decrease to 50% in the second year and 20% in the third, allowing SMEs to transition from informal to formal status.
Key Events at the 88th Bancaria Convention
- President Claudia Sheinbaum will attend for the first time in her current role, potentially urging commercial banks to lower interest rates.
- A panel discussion titled “The Role of SMEs in the Economy and Their Financing by Banks” will take place.
- James Robinson, the 2024 Nobel laureate in Economics, will speak on “The Importance of Institutions in Country Development.”
Expected Impact on Mexican SMEs and Employment
By providing credit access and fostering formalization, ABM’s initiative aims to empower Mexican SMEs. As these businesses grow and transition from informal to formal status, they will create more jobs than previously possible, contributing significantly to Mexico’s economic development.
