Factors that limit the growth – Credit Consolidation


 What factors limit the growth ?

Let’s go back two years. It was in 2017 when an earthquake occurred that left terrible consequences in the country and one of the most affected states was Puebla, an entity that suffered millions of losses for all entrepreneurs

Only in what remained of 2017, sales in the state of Puebla fell by at least 15% and continued to fall in 2018 due to other factors such as insecurity, fear and lower arrival of tourists.

To counteract the negative effects, the SMEs in Puebla began to seek investment that would help stabilize business; However, the entrepreneurs found themselves with a lack of support when applying for a loan. But it does not end there.

Having no support from the big banks, subsidies from the federal and state governments began to be a financing alternative. The problem with this is that the government benefit only reached less than 1% of the total number of companies in the entity.


Lack of access to credit, a challenge

Lack of access to credit, a challenge for SMEs

According to the Growth and Credit Report of Pymes 2019, made by Kakiro, the lack of access to credit affects three of every 10 the country, a situation that slows the growth of a sector that is fundamental to the Mexican economy.

We started by saying that the problem arose in 2017, but not even a year later things improved; In fact, in 2018 there were more setbacks in access to credit. If we see it in figures, the number of active loans granted by the bank last year had a decrease of 5.8%.

Insecurity in Mexico

 Insecurity in Mexico

We are already talking about financing, but what is the use of money if there are no optimal conditions to invest it?

Visualize it: only in 2018 nine out of 10 businessmen in Mexico City suffered in their person, relatives, close circle or in their business, any event related to crime.

This figure, revealed by the Chamber of Commerce Services and Small Tourism of the capital (Canacope), represents an increase compared to 2017, when seven out of 10 micro, small and medium businesses were affected.

The Growth and Credit Report of Kakiro complements this information indicating that 8.7% of the consulted businessmen said that insecurity was a factor that slowed down their business. 


Economic uncertainty

Lack of access to credit, a challenge for SMEs


Let’s say there is money and security, one more factor that slows companies is the lack of certainty in the country. In Kakiro we find that one in five entrepreneurs see the economic situation as a factor that limits the growth of their business.

Our report indicates that the percentage of entrepreneurs with sales over three million pesos went from 23% in 2017 to only 17% the following year.

We only mentioned three factors that have limited the growth since two years ago, but of course other issues could be taken into account such as inflation or unfair competition. In the end, each factor must be taken into account for the economic growth of the country.