Mexican President Claudia Sheinbaum Pardo has asked the country’s financial sector to lower interest rates in order to stimulate the economy without endangering it. She now awaits a response.
She has made the request twice, the first being during the “people’s morning press conference” on April 14: “We have asked Edgar (Amador Zamora, head of the SHCP) to work with the banks, both development and commercial, to lower rates. In other words, even though the Bank of Mexico has lowered the rate, access to credit for a small or medium-sized business remains very difficult.”
The comment was in reference to the announcement made by the Bank of Mexico (Banxico) on March 27, when it unanimously decided to lower its benchmark interest rate by 50 basis points to 9%, after having reached a historic high of 11.25% in February 2024.
Almost immediately, financial specialists warned that interest rates cannot be lowered by decree or voluntarism, but rather that favorable conditions must be created. They also agreed that if monetary policy is aligned with the executive branch’s objectives, it could send negative signals to the markets, especially given that inflation, although declining, has not yet been fully controlled.
However, President Sheinbaum insisted on the morning of Wednesday, April 16, that “interest rates must be lowered to allow access to credit—and development banks will do their part in this—so that these ideas, this intelligence, this creativity that we Mexicans possess can be translated into a small business, into the development of these activities; because today, there are very, very high interest rates, which are sometimes not sufficient for the first year of a business.”
In this regard, she recalled that “Mexican banking has greatly protected itself because of what happened in ’94, but that doesn’t mean that the requirements for some loans won’t be lowered. So, this is what we are working on to ensure… that there are loans for micro, small businesses that have the desire to grow.”
Signs from the Mexican Banking Association
Following President Sheinbaum’s reiteration, the Mexican Banking Association (ABM) has not issued a new official statement. However, it should be noted that on April 3rd—as part of the objectives set forth in Plan Mexico—it was proposed that by 2030, 30% of the country’s MSMEs would have access to formal financing, and to this end, it seeks to increase the number of MSMEs with access to credit by at least 3.5% annually.
The ABM stated that there have been discussions with the government to work in favor of MSMEs in Mexico, and the organization stated that the goals are achievable through mutual collaboration in areas such as:
Support from development banks
Regulatory changes to simplify requirements
Integrating MSMEs into the supply chains of anchor companies
Reducing informality.
In this context, the ABM’s response could be favorable.
Source: eleconomista
