Expanding financial access for Mexico’s poor and support economic recovery. During the past five years, the World Bank has been supporting Mexico’s efforts to deepen financial inclusion and expand access to finance, which has been a critical bottleneck for growth and poverty reduction. The Bank has supported Mexico’s expansion of needed financial access to poor and rural populations, women, youth, and micro, small and medium sized enterprises (MSMEs).
Through an established network of private financial intermediaries (PFIs), the Expanding Rural Finance Project increased the availability of finance to rural MSMEs in areas where commercial banks had not been able to reach local producers. This Project helped to establish and/or improve credit, risk, and management capacity of more than 192 small PFIs located in rural areas. Between 2016-2019, 174,000 credits for productive purposes were extended to 140,000 rural producers and MSMEs (average loan size of US$1,850), of which 76 percent live in rural areas in the poorer states of the South, 81 percent are women, and 17 percent live in communities classified as marginalized or highly marginalized by the National Council for Population.
Rural MSMEs benefited from improved access to finance and expanded economic activity, and the funding helped PFIs reach more clients and grow their activities in rural areas with low levels of non-performing loans. Lending through PFIs and thus leveraging their distribution networks helped not only increase the Rural Financial Development Agency’s (FND in Spanish) reach of a difficult segment of the market. It also served to promote inclusion, job creation, and support private sector supply of rural finance in Mexico’s poorest states while making them self-sustained over time. This experience can now be passed on to other countries in which rural finance is limited and/or proved difficult to expand. The program supported by the Bank has helped create a path towards an effective recovery as well as supporting a longer-term development agenda in the area of financial sector development.
Last Updated: Mar 29, 2021