Mexico Financial Sector Assessment Program : SME Finance
Major reforms and public sector efforts in recent years have focused on improving conditions for increased private sector financing. However, and despite numerous financial institutions operating in the market, financial services penetration remain...
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| Language: | English |
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World Bank, Washington, DC
2017
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| Online Access: | http://documents.worldbank.org/curated/en/683341507875651705/Mexico-SME-finance-technical-note http://hdl.handle.net/10986/28601 |
| Summary: | Major reforms and public sector efforts
in recent years have focused on improving conditions for
increased private sector financing. However, and despite
numerous financial institutions operating in the market,
financial services penetration remains low. While much
progress has been made, challenges remain in terms of
affordability and ease of access to finance. Banks are a
major source of funding to the private sector and small and
medium enterprise (SMEs) in particular, with highly
standardized credit products. Other Financial Institutions
(OFIs) face a number of growth and market development
challenges to effectively serve the lower end of the SME
segment, including funding difficulties and institutional
capacity. The government plays a critical role through the
development banks in promoting credit to SMEs through
guarantees and second tier finance programs. The legal
framework for immovable collateral (real estate) is affected
by high origination costs and lengthy enforcement
procedures. The legal framework for movable collateral
(equipment, inventory, accounts receivables, and cash) has
been modernized. Challenges remain to unify the legal
framework and address enforcement delays. |
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