SMEs Are Key to Economic Recovery

When passion, technology and data science are combined to create unique tools that solve, with real-time information, the daily financial and operating pains of Mexican SMEs, everyone wins.

It is not a secret that running a small business is very difficult — per INEGI, 1.6 million SMEs closed during the last two years alone. This is alarming as the 4 million registered SMEs make up 99-plus percent of all companies registered in Mexico: SMEs are the “engine” of the Mexican economy. A study carried out by the Association of Entrepreneurs found that SMEs that failed mainly attributed their problems to lack of market knowledge (34 percent) or poor business management (32 percent). The economic success of the country, only now beginning to recover from the effects of the COVID-19 pandemic, depends largely on the strength of its institutions and on its small and medium-sized companies.

In such a difficult environment, even SMEs that have proven their mettle face challenges. A solid business and a good leadership team is often not enough: SMEs often have difficulty dealing with administrative complexities and meeting their month-to-month financial needs. This is not because the businesses aren’t profitable or well run, it is simply that the timing of money “in” and “out” can sometimes be wildly mismatched, putting strain on the business. There are financial products that can help companies with these problems but they are often only available to larger companies. Traditional financial institutions have decided that it is simply too hard to serve SMEs and have largely left behind this important segment.

This is where Xepelin saw an opportunity to be an ally to SMEs, and used technology to build tools that help companies organize their information and access capital. Today, tens of thousands of companies have used Xepelin to pay suppliers, organize their information, see forecasts that make use of advanced machine learning models, and borrow money at competitive rates. They do this all using our digital platform, which helps SMEs sign up and solve their pain points in hours not weeks. The response has been tremendous: in the last two years, we've processed over US$1 billion in payments, with financing embedded to thousands of satisfied businesses.

We are proud to have recently launched our new Payments product, a tool that uses proprietary algorithms on accounts payable information to schedule and automatically manage payments to suppliers and keep track of those payments in an attractive, simple to use dashboard. This frees up valuable time, and can also ease working capital pains if SMEs decide to make use of the embedded credit option.

Xepelin Payments is a great example of the company living its mission — to be the digital CFO for SMEs in Latin America. Everything we build at Xepelin is designed to save time and money for SMEs and let them focus on what they do best: growing their business and delivering a great experience to their customers. We are only just getting started in Mexico, and know SMEs see us as their strategic ally in dealing with day-to-day pains, small and large.