The mandate of the Development Bank

Development Banking (DB) was not invented in Mexico nor are we one of an elite of countries that have this exclusive tool; in fact, we could rather say that it is common for different economies to have it, even the most modest ones. In our country, the most representative are the Banco Nacional de Obras y Servicios Públicos (Banobras 1933), Nacional Financiera (NAFIN 1934) and Banco Nacional de Comercio Exterior (Bancomext 1937). Take note of those years, because they are a direct precedent of one of the times of greatest economic growth, and I am referring to the so-called stabilizing development or Mexican miracle (1954-1970).

Obviously, successful results such as those mentioned have multiple internal and external causes, but they always imply an adequate government administration that integrates different serious public policies, well thought out and, above all, executed responsibly. That stage, which ended in 1970, was later affected by the administration of President Echeverría (1970-1976), characterized by false nationalism, costly and irresponsible populism, markedly authoritarian behavior and, in general, contempt for the production plant and freedom of expression, which Unfortunately, it resulted in an increase in public debt, inflation, devaluations and even social resentment against the armed forces, due to the way in which they were used.

Considering that the BD was born close to the Second World War (1939-1945), what stands out is the important role it played in the growth and consolidation of the Mexican industry and economy, being a key factor for the strengthening of the stock market, and companies that became leaders in their sectors in the country and internationally, such as steel, cement, fertilizers, electromechanical, etc., as well as for the construction of strategic infrastructure such as ports, highways, airports, dams and many others equally vital to contribute to the development of the country.

Let’s pause and reflect on the last name that distinguishes these banks from the rest. Unlike the others, which are privately owned and authorized as Multiple Banking (BM), these entities are owned by the Mexican State, ultimately the interest belongs to Mexicans and their essence and reason for being is precisely to contribute to the development of the country and are segmented by sector, so that they specialize and really affect the growth of the economic area in question. Its justification for existing is only that, to serve as a tool for the Mexican State, based on a long-term, comprehensive and strategic vision, to promote an area or sector of the economy, in substitution for the absence or deficiency of banking performance. commercial.

Their framework of action is complex because they are justified to the extent that their functions and objectives are aligned with the constitutional basis (arts. 25, 26 and 28) and then a whole network of laws and provisions that range from the Law of Planning and the Organic Law of each one, in accordance with the National Development Plan and the corresponding sectoral development plan, which in this case is the National Development Financing Program. In other words, they were created expressly for something and that is what they can do, no more and no less.

The other word that must be kept in mind is the term “bank” and that implies that they are subject to the Law of Credit Institutions, and the provisions, prudential regulation and supervision that the CNBV issues for this purpose, and in what is conducive the SHCP and BANXICO, with the consequent subordination of regulated entities; where the institutions are obliged to comply with all the regulations and the authorities to supervise that the institutions comply with them, and where appropriate, to impose the corresponding sanctions.

The BD, among its main activities, carries out financing operations, in other words, gives credit in the obvious understanding that such amounts will be subsequently paid by the debtors and re-placed, in compliance with its purpose and reason for being, as well as of the laws and financial regulations to which it is subject. To the extent that these resources can be lent, collected and lent again, they will not be of economic benefit to a group of shareholders (as in the BM), but to our country. This issue is so important that the LIC itself typifies (art.112) as a crime when a loss or patrimonial damage is caused to a bank, derived from false information provided by the debtor to obtain financing, or when the bank employee, knowing that the debtor does not have the necessary payment capacity, grants the credit.

This is its legal mandate, and its non-observance implies responsibilities. Therefore, if the bank figure is used and credit as a vehicle, the only acceptable response is the payment of the obligation; If, on the contrary, the intention of both parties is from the beginning that there is no fulfillment of that obligation, it is more than in financial fields, in the scope of the subsidy or gift in charge of funds created for that purpose.

The difference in the purposes pursued by the BM and the BD complicates their comparison; however, for illustrative purposes and with information from the DB as of March and the WB as of June of this year (both published by the CNBV), we can see that the total credit portfolio of the DB represented $1,021.6 billion pesos while that of the WB $5,891 billion pesos, which means that the DB finances around 17% of the credit granted by credit institutions in the country. In terms of Delinquency Rate (IMOR), in general the BD reported 3.19% while the BM 2.32%, the item with the greatest difference being housing credit where the BD reported 8.48% against 2.90%. of the BM. It should be noted that the percentage of participation in total financing is not decisive, since in the world there are models with a strong participation in DB and high associated fiscal costs, and others with a smaller participation but with high efficiency (Spain).

In short, the Development Bank, providing well-granted, specialized and targeted loans, has shown that it is effective and contributes to the development of the country, to the benefit of all. In addition, when this tool has been used for purely political purposes, it has also shown that its losses increase everyone’s debt, to the benefit of some.

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