Open Finance Unlocks Credit For Mexican SMEs

For years, a significant paradox has defined the financial landscape in Mexico. On the one hand, we see a vibrant, dynamic economy, driven by the talent and the resilience of countless small and medium-sized enterprises (SMEs) and a vast workforce. On the other hand, we confront a stark reality: a profound financial exclusion that leaves millions without access to the formal credit essential for growth and stability. This isn't merely a statistic, it's a barrier to opportunity, a heavy anchor on potential. My journey, and indeed Belvo’s mission, has been deeply rooted in addressing this challenge, aiming to prove that financial inclusion can be both profitable and scalable, and above all, responsible. 

Imagine a significant portion of a nation’s workforce, its backbone, operating on the fringes of the formal financial system. The numbers are sobering: 7 out of 10 adults in Mexico lack access to formal credit. For SMEs, which remarkably generate 72% of formal employment and represent 99% of all businesses in the country, the lack of sufficient working capital is a constant threat to their survival and job creation capabilities. The primary culprit? A glaring absence of credit history in traditional bureaus or the partial informality of their incomes. The traditional path to credit — laden with printed documents, in-person interviews, and a heavy reliance on historical credit bureau data — is not only cumbersome and costly but also inherently exclusionary. It rejects between 20% and 30% of applications simply because the applicant lacks a banking history. This isn't just inefficient; it's a systemic roadblock. 

The Power of Open Finance 

At Belvo, we believe that data, when harnessed responsibly and with explicit user authorization, holds the key to unlocking this trapped potential. This conviction forms the bedrock of open finance, an ecosystem where financial information can flow securely to create more efficient, inclusive, and intelligent financial products. We're not just building technology, we're building trust through data. This is where the concept of a "virtuous circle" comes into play: a self-reinforcing cycle where better data leads to better credit decisions, which in turn fuels growth, formalization, and broader financial access. 

A prime example of this virtuous circle in action, one that truly "makes sense" for Mexico, is our strategic alliance with Clip, a leading payment platform that has evolved beyond mere payment acceptance to offer software, capital, and management services to hundreds of thousands of businesses across the country. Their journey, much like ours, is about accompanying businesses at every stage of their growth.

Our partnership with Clip integrates Belvo’s full suite of products into Clip’s credit origination and collection flow, fundamentally transforming the process for merchants. This integration introduces three crucial layers of data and automation that address the core limitations of traditional lending: 

1. Verifying Employment and Income With Official Data: This is perhaps the most revolutionary aspect for a market like Mexico. Instead of relying on outdated credit bureau data or cumbersome paper proofs of income, we securely access a user's labor history from the official Mexican Social Security Institute (IMSS) with their express consent. The depth and timeliness of this data are extraordinary; Mexico reached a historic record of 22.46 million formal jobs registered with the IMSS in March. 

○ What does this mean in practice? It means that a neighborhood vendor, already using Clip for payments, can now prove their income with just a CURP. The verification process, which once took days, is now reduced to seconds. This opens access to traditionally excluded segments: gig workers, family micro-enterprises, and even employees without a traditional payroll card. This isn't just about speed, it's about expanding the market inclusively. We've seen how integrating official salary evidence and labor stability metrics, like Belvo’s Employment Score that predicts future income generation based on IMSS history, can significantly increase the GINI coefficient of risk models and boost loan approvals without deteriorating portfolio quality. It allows us to move from measuring risk based on assumptions to using "living data." 

2. Real-time Employment Notifications: Beyond a snapshot, our system provides automatic alerts when a user’s employment situation changes, be it a shift in employer, a salary adjustment, or a change in employment status. This dynamic capability allows lenders to make real-time adjustments to credit lines, proactively manage risk, and even re-engage customers who might not have qualified previously but have since seen an income increase. It fosters a more flexible and responsive credit model. 

3. Seamless Direct Debit Collection (Domiciliación Bancaria): The virtuous circle isn't complete without efficient collection. Our direct debit solution enables frictionless recurring payments. Once authorized, payments are automatically debited from the user's bank account, removing the burden of manual reminders or the need for a physical bank branch visit. For Clip, this represents an aligned risk model where payments are processed massively, with real-time reconciliation and without the card commissions that erode margins. This automation has a tangible impact: it can increase customer retention by 30% for sectors with monthly fees and significantly reduce the operational burden of collection. 

○ This method is not only more reliable than traditional card payments, which can be prone to fraud and chargebacks, but also more cost-effective. We even offer Penny Validation, a technique to verify bank account ownership and status, minimizing fraud and ensuring successful transactions. Our commitment to security is underscored by our PCI DSS compliance and ISO 27001 certification. 

The Clip-Belvo alliance is a powerful demonstration of how these components converge. Merchants applying for loans through Clip can now undergo a process that takes minutes instead of days, eliminating reliance on physical files or traditional bureau history. A merchant can prove their income with a single CURP, secure a credit line based on their employment stability, and start investing in inventory on the very same day. 

Clip plans to deploy working capital lines for businesses ranging from those invoicing MX$5,000 ($264) monthly to regional chains processing millions of pesos, maintaining a flexible ticket approach and continuous evaluation. Our shared objective is clear: to drive formalization, reduce cash usage, and prove that open data can generate quality credit at scale. This ambitious deployment will roll out in stages, with an estimated pilot reaching over 50,000 merchants in the next six months before a general opening to their entire user base. 

This collaboration is more than just a business deal, it's a testament to a shared belief in a better financial future for Mexico. By converting labor information into a credit asset and making recurring payments an invisible, seamless process, we are marking a significant milestone in the evolution of Mexican open finance. It’s about creating an ecosystem where confidence is built on verifiable data, and inclusion is measured by the real growth opportunities provided to the businesses that are the true engines of the economy. This is the virtuous circle we are building, one data point, one responsible loan, one growing business at a time. It’s an approach that is not just viable, it’s essential for Mexico’s continued prosperity