Introduction to the Banking Convention 2025
The Banking Convention 2025 is approaching, marking its first-ever location in Nayarit. The event, titled “The Banking Sector and its Contribution to Mexico’s Development,” will address crucial topics such as sustainability, cybersecurity, financial inclusion, and digital transformation. However, two significant themes will be highlighted during the convention on May 8th and 9th in Nuevo Vallarta-Nayarit: lower interest rates and financing for small and medium enterprises (SMEs).
Lower Interest Rates and SME Financing
The convention kicks off on May 8th with the signing of an updated version of Mexico’s banking sustainability protocol and a partnership agreement between the ABM and CDMX’s Finance Department. The focus on lower interest rates and SME financing was initiated by Claudia Sheinbaum Pardo, the current head of Mexico City, during her April 14th morning conference.
Sheinbaum Pardo’s comments referred to the Banco de México (Banxico) announcement on March 27th, where they unanimously decided to reduce their reference interest rate by 50 basis points to 9%. This followed a historic high of 11.25% in February 2024. Sheinbaum Pardo also confirmed her attendance at the Banking Convention.
Financial experts cautioned that interest rates cannot be lowered by decree or voluntary action, as it may send negative signals to markets. The primary concern is that inflation has not been fully controlled.
ABM’s Commitment to Collaboration
Despite these concerns, the Association of Banks of Mexico (ABM) has maintained its commitment to collaborate with the federal government to support Mexico’s banking sector. The ABM previously stated that they were engaged in discussions with the federal government to work together for mutual benefit.
SMEs Need Faster Access to Credit
One of the key objectives outlined in Plan México, introduced earlier this year and reinforced recently, is to ensure that 30% of Mexico’s micro, small, and medium enterprises (MSMEs) have access to formal financing by 2030.
To achieve this, the number of MSMEs with access to credit must increase by at least 3.5% annually. In this context, Sheinbaum Pardo explained that during the Banking Convention, a program will be announced to facilitate development and commercial bank loans for MSMEs.
The ABM has confirmed that they have been in talks with the government to support Mexico’s SMEs.
Key Questions and Answers
- What is the Banking Convention 2025? The Banking Convention 2025 is an event focusing on the banking sector’s role in Mexico’s development, addressing key topics like sustainability, cybersecurity, financial inclusion, and digital transformation.
- Why are lower interest rates and SME financing crucial? Lower interest rates aim to stimulate the economy without jeopardizing the country’s financial stability. Enhanced access to credit for SMEs is essential, as only 10% of MSMEs currently have formal financing.
- What is the target for MSMEs and formal financing? By 2030, 30% of Mexico’s MSMEs should have access to formal financing.
- What is the ABM’s role in supporting SMEs? The ABM has been engaging with the government to collaborate and create favorable conditions for Mexico’s SMEs.
