Microcredits for Microenterprises: Road to Recovery

Productive credit for microenterprises is fundamental for the economic reactivation of communities. Tatiana Clouthier, Minister of Economy; Ana Bárbara Mungaray, Director of the Ministry’s Productive Development Unit and Alejandro Rosas, Director of the Prospective, Planning and Evaluation Unit, presented the Crédito a la Palabra 2021 (Credit in Good Faith) program with the objective of supporting MSMEs. “From the beginning of the pandemic, we knew closures were going to affect MSMEs and especially the most vulnerable sectors. That is why the SE designed a program to administer direct transfers to the most vulnerable people and companies,” Graciela Márquez, former Secretary of Economy, told Forbes. Thus, over the course of 2021, MX$1.5 billion ($70 million) will be allocated to support 60,000 microenterprises.

These loans, however, will only be awarded to those who meet the following profiles: 20,000 will go to microenterprises that have not laid off personnel during the pandemic, another 20,000 will be given to women who are in charge of a business and, finally, another 20,000 loans will be given to family microenterprises from the Censo del Bienestar (Well-Being Census). 

Other institutes have also worked to promote financial security. Throughout the year, the development bank CAF has worked in many Latin American countries to combat and mitigate the social and economic effects of the pandemic. Many countries have prioritized support through local development banks, especially in the case of MSMEs, which are key to economic growth in the region. These partnerships make it possible to respond in advance to the needs of productive sectors.

“We knew that clients were going to need financing and that is where Compartamos Banco plays a very relevant role. In 4Q20 alone, we were able to grow our portfolio by more than 11 percent, an example that the sector has great credit needs,” said Patricio Díez de Bonilla, CEO of Compartamos Banco, to El Economista. For Díez, there is still an opportunity in Mexico, as the opportunities for financial inclusion are still significant. In his opinion, nine out of 10 Mexican micro-entrepreneurs do not have access to formal credit.