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Commercial bank financing for micro-enterprises and SMEs in Mexico

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  • Padilla, Ramón
  • Fenton Ontañon, Rodrigo

Abstract

This article examines commercial bank lending strategies for micro-enterprises and small and medium-sized businesses (SMEs) in Mexico, and the factors that promote or hinder lending in this segment. With this in mind, in 2011 a detailed survey was conducted of commercial banks operating in Mexico. Although credit to microenterprises and smes still represents a small share of the loan portfolio, the survey results point to growing interest in broadening it. Three different business models were identified, with major differences in strategies for offering financial services to this segment of enterprises. The greatest barriers to increasing the credit supply are lack of information, creditor protection failures, informality, and the changes and disruptions that commercial banking has experienced over the past three decades.

Suggested Citation

  • Padilla, Ramón & Fenton Ontañon, Rodrigo, 2013. "Commercial bank financing for micro-enterprises and SMEs in Mexico," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), December.
  • Handle: RePEc:ecr:col070:37002 Note: Includes bibliography.
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    More about this item

    Keywords

    PEQUEÑAS EMPRESAS; EMPRESAS MEDIANAS; FINANCIAMIENTO DE EMPRESAS; EMPRESAS COMERCIALES; CREDITOS COMERCIALES BANCARIOS; ENCUESTAS; SMALL ENTERPRISES; MEDIUM ENTERPRISES; BUSINESS FINANCING; BUSINESS ENTERPRISES; BANKERS' COMMERCIAL CREDITS; SURVEYS;

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • L29 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Other
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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