SMEs are the backbone of Mexico’s economy, but it’s time their banking caught up

Core Insights - The consumer credit industry in Mexico is thriving, yet small and medium-sized enterprises (SMEs) face significant barriers in accessing banking systems and credit, leading to reliance on cash and liquidity struggles [1][4]. Group 1: Importance of SMEs - SMEs constitute 95% of all Mexican businesses, contribute 52% to the country's GDP, and employ 68% of the population, indicating their potential to significantly boost the Mexican economy if adequately supported by the financial system [2]. Group 2: Banking Sector Limitations - The traditional banking sector in Mexico is dominated by three institutions that control about half of all assets, focusing primarily on low-risk, high-margin sectors, which leaves SMEs categorized as high-risk and underserved [3]. - SMEs often face high fees, unfeasible requirements, and complex reporting processes when attempting to access credit, further limiting their financing options [4]. Group 3: Credit Access Challenges - Many SMEs are excluded from the banking system due to their young age or limited credit history, creating a cycle where they cannot obtain the necessary credit to grow and innovate [5]. - The lack of cash advances on digital payments is a significant barrier to SME growth, despite advancements in the retail system's digitization [6]. Group 4: Government Initiatives - The Mexican government acknowledges the challenges faced by SMEs and has taken steps to improve credit access, as evidenced by an agreement signed in May 2025 between President Claudia Sheinbaum and the Mexican Banking Association [7].