Access to credit for MSMEs must be a right: Fadlala Akabani

Micro, small and medium-sized enterprises (MSMEs) are the foundation of the Mexican economy, but the ones that face the greatest challenges regarding the lack of financing and procedures, which prevents them from growing. Therefore, access them should be a rightconsidered Fadlala Akabani Hneide, secretary of economic development.

“The lack of access and the high cost of financing for entrepreneurs, MSMEs and other actors in the social economy is an obstacle to the growth of productivity and income and the well-being of these sectors, which represent 98.8% of the units economic and generate 85.3% of employment. Therefore, we consider access to credit for this population as a law”, he stated during his fourth government report.

According to data from the Bank of Mexico, as of March 2021, one of the most critical months for business, in March 2021, the participation of credit to SMEs in the non-financial private sector was 9.6%, below consumer credit (22.8%), housing credit (23.5%) and credit to large companies (44.2%). Within credit to companies, the figure was 17.8 percent.

Given the need for MSMEs to obtain resources, especially during the pandemic that condemned the lives of millions of businesses, Fadlala assured that since 2018 the Social Development Fund has delivered 148,833 loans, equivalent to 1,479 million pesos, of which 58.9% were Covid-19 loans focused on “neighborhood” businesses that were in critical situations such as convenience stores groceries, aesthetics, stationers, bread outlets, collections, poultry shops and fondas.

Of the beneficiaries, 16.9% were women entrepreneurs and 14.7% for productive self-employment activities. Those granted to women have led to the generation or preservation of 225,191 jobs.

“The financial support program is characterized by a interest rate of 6% annual for MSMEs and 0% for businesses located in highly marginalized neighborhoods”.

favorable recovery

Although the pandemic forced the closure of businesses, Fadlala assured that signs of a favorable recovery of MSMEs have been seen, since between March 2020 and the same month in 2022, there weren 3,939 new companies, mainly in the tertiary sector, according to the National Institute of Statistics and Geography.

During the year, the Electronic System of Notices and Permits of Mercantile Establishments, records 18,313 new commercial establishment opening notices low impact, a figure considered the highest since the start of the pandemic.

This, in addition to other efforts, estimates “in 2022 economic growth for Mexico City between 2.8% and 3.5% of GDP compared to 2021,” said Fadlala.

To strengthen the economic recovery and growth of MSMEs, he indicated, more actions are being carried out in addition to credits such as training and bonding through the SEDECO Investment Promotion Center and the Social Development Fund.

In this regard, he indicated that training is provided on marketing, foreign trade, opening procedures, investment incentives, trademark registration, business models, administration, finance, accounting, marketing, business operational management, among others, an initiative that has benefited 209,672 personas.

Regarding the relationship, we work with the Supplier Development Program, which at the moment, has 1,000 MSMEs in the valuation process to be accepted as suppliers in self-service stores such as Soriana, Super Issste, Home Depot, ANTAD Biz, Walmart and Oxxo. Online companies are also included such as Amazon and Mercado Libre, as well as the Mexican Association of Online Sales, which is in charge of training in business models and Internet sales, which has allowed the addition of 3,453 entrepreneurs to the world of e-commerce.

“From the Secretariat of Economic Development we have focused on closing the gaps between companies, guaranteeing that training, bonding and access to financing are rights for all those who carry out economic activities,” he concluded.