COVID-19: More than 135,000 Mexican MSMEs benefit from CAF-NAFIN Partnership
CAF has granted a 5.9-billion-peso credit line to Mexico’s Nacional Financiera (NAFIN) to help support the Aztec nation’s MSMEs in human-intensive sectors such as commerce, industry and services, which are most vulnerable under the current health and economic crisis.
Over the course of the year, CAF—development bank of Latin America—has provided a swift and timely response to countries in the region, in an effort to combat and mitigate the social and economic effects of the COVID-19 pandemic. In Mexico, this task has been completed by channeling funds for micro-, small- and medium-sized enterprises (MSMEs) through Nacional Financiera (NAFIN). This institutional partnership provides a prompt response to the needs of the country’s productive sectors and financial markets, which require support to minimize the impact of the ongoing pandemic.
Between March and April, funds in the amount of 5.9 billion pesos were disbursed, financing as many as 135,368 MSMEs through the line of credit granted by CAF to NAFIN. Of these funds, 63 percent went to micro-businesses, which represent the largest number of economic units in the country. In this regard, it should be noted that according to INEGI’s 2019 economic census, as many as 95 percent of Mexico’s 6.05 million businesses are micro-businesses employing one to 10 employees, which find more hindrances when trying to access credits.
Beneficiaries are in the trade, industry and services sectors, which are the most intensive in human capital and therefore most vulnerable under today’s health and economic situation.
These funds disbursed by CAF reached the MSMEs through the channels provided by NAFIN and commercial banking. Thus, MSMEs’ working capital and investment needs are met, in an attempt to counter the effects of the COVID-19 pandemic. The financial instruments offered by this partnership in the interest of Mexico’s productive sectors generate incentives to grant new credits, and play a countercyclical role and thus promote the recovery of the country’s economic activity.
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