MSME lending in Mexico: the gap that reveals an opportunity

In Mexico there is inequality in access to financing between large companies and Micro, Small, and Medium Enterprises (MSMEs). Although the latter group makes up the majority of economic units and is key to employment and GDP, they receive a small fraction of the credit available. This gap stems from a lack of access to sources of financing and from regulatory challenges that limit their growth, among other factors.

This disparity in access to credit affects the economy, as it prevents the development of innovative, productive companies. Financing difficulties are even greater for certain sectors and regions, as well as for women-led businesses. This situation, documented by international organizations such as the OECD and the World Bank, is common in developing economies, where millions of MSMEs have unmet financing needs, particularly in sectors such as commerce and services.

In recent decades, access to credit for MSMEs in Mexico has also been restricted, in part, by high financing costs and the concentration of supply in a few institutions. Barriers include a lack of awareness of credit options and high documentation requirements.

To narrow this gap, one solution is to improve the generation of reliable information that allows financial institutions to assess the credit risk of MSMEs. Formalization, the digitalization of payments, and technologies such as Open Finance can enable secure, efficient data sharing. Syntage, a business information aggregation and analysis platform, offers data analytics that improve credit risk assessment and helps foster greater financial inclusion, as well as economic growth through better access to financing for MSMEs.