IDB Invest and the Mexican Business Council join forces to facilitate production chain funding and support MSMEs.
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Continuing productive activity and job protection are priorities in the context of the COVID 19 crisis. For this reason IDB Invest, Member of the IDB Group, which finances sustainable companies and projects, and the Mexican Economic Council (CMN) announced an agreement signed by the Secretary for Finance and Public Credit (SHCP) Facilitate the financing of production chains and support for the micro, small and medium-sized enterprises (MiPymes) in Mexico.
Mexico has approximately 4.1 million MSMEs, which make up 42% of gross domestic product (GDP) and create 78% of employment in the country. However Only 23% receive funding from commercial banks and this limited access to credit is one of the main constraints on its expansion and survival.
The agreement is based on funding from Reverse factoring, an instrument that enables MSMEs to obtain a simple financing alternative at very attractive conditions.
IDB Invest, which seeks to expand, accelerate and democratize access to credit for the MSMEs that make up the value chains of large corporations, is aiming to build a $ 3 billion credit line program. Conversely, they complement the lines of this type of program that IDB Invest already has in Mexico.
IDB Invest Seek collaboration and support from local commercial banks, international investors and development banksto mobilize additional resources to expand the reverse factoring lines.
The product of Loan, revolving and with an average term of 90 daysenables the financing of an estimated amount of up to $ 12,000 million (approximately 290,000 million pesos) per year on bills from 30,000 Mexican SME suppliers. Provisions can be made in both Mexican pesos and dollars, depending on the needs of each MyPyme.
IDB Invest strives for expansion, acceleration and dDemocratize access to credit for the MSME that make up the value chains of large companies. This is part of its strategy to support the economic stability of the region through the private sector, since maintaining liquidity in value chains and in trade multiplies social and economic benefits.
In a context of uncertainty and global economic instability caused by the COVID 19 crisis, the availability of finance for growing markets and for vulnerable segments is affected.
IDB Invest is committed to maintaining the proper functioning of the supply chains and optimizing working capital, since priority is given to continuing productive activity and protecting jobs. The program could also be carried out in other Latin American and Caribbean countries.
The organisms that are part of the CCE Small businesses as well as small and medium-sized businesses such as Concamin, Canacintra, Coparmex, Concanaco Servytur, CNA, ANTAD, COMCE and Canaco CDMX have celebrated the conclusion of this agreement for the benefit of their MSME members.