Commercial bank financing for micro-enterprises and SMEs in Mexico

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.