LatinNews Daily - 24 August 2023

* Mexico’s association of banks (ABM) has announced that it estimates that additional availability of credit to small- and medium-sized enterprises (SMEs) will amount to M$140bn (US$8.3bn) over the next five years. In a press conference, ABM president Julio Carranza called for the “overlooked potential” of SMEs to be unlocked through the collaboration of banks, businesses, and government, noting that the banking sector currently has 254,000 clients that are classified as SMEs, representing 95% of the corporate portfolio. Carranza highlighted that formalised SMEs that have access to credit experience much higher growth than those that remain informal, generating “seven times more investment, six times more income, six times more productivity and four times more employment”. Carranza highlighted factors that need to be promoted for economic activity to be boosted and credit stimulated, including financial education and the promotion of formality, capitalising on nearshoring opportunities by maintaining competitiveness in interest rates, and implementing regulatory changes to facilitate formalisation. Accordingly, Carranza referred to a regulatory facility approved last March by the bank superintendency (CNBV) that will benefit over 17,000 new SMEs with more than M$10bn annually.