Mexico City, Mexico, January 25th, 2024 – The International Finance Corporation (IFC), a member of the World Bank Group, is set to bolster financing for small and medium-sized enterprises (SMEs) in Mexico by providing a substantial $93 million credit guarantee to Banco Santander Mexico. This strategic move aims to channel increased resources towards SMEs, a vital engine of the Mexican economy.
The IFC’s innovative financing solution utilizes a synthetic risk transfer (SRT), a sophisticated financial instrument designed to optimize banks’ regulatory capital. By reducing these capital charges on existing loans, the SRT mechanism frees up capital, enabling Banco Santander Mexico to extend new credit lines more readily to SMEs. Despite its proven effectiveness in unlocking lending capacity, the SRT remains an underutilized tool within the Mexican and broader Latin American financial landscape. Notably, IFC stands as the sole multilateral development institution actively offering SRT instruments within emerging markets, highlighting its commitment to pioneering financial solutions.
Juan Gonzalo Flores, IFC Country Manager for Mexico, emphasized IFC’s dedication to fostering financial innovation to better serve SMEs: “IFC is committed to pioneering investment and advisory services that empower financial intermediaries to more effectively reach the SME sector. Banco de México’s recent data underscores the critical need for enhanced SME financing, revealing that only 36.6 percent of Mexican companies with fewer than 100 employees currently have access to commercial bank loans. Through innovative transactions like this credit guarantee to Santander Mexico, both institutions are actively contributing to building a more robust and prosperous future for Mexican SMEs.”
SMEs are widely recognized as the cornerstone of job creation in emerging economies, generating between 70 and 95 percent of new employment opportunities. Enhanced access to adequate financial resources empowers SMEs to upgrade their infrastructure, expand their production capabilities, and sharpen their competitive edge. This, in turn, fuels sustainable economic growth across Mexico, contributing to overall prosperity and development.
About Banco Santander Mexico
Banco Santander México, S.A., Institución de Banca Múltiple, Grupo Financiero Santander México (referred to as Banco Santander México or the Bank), ranks among Mexico’s leading financial institutions. Santander Mexico delivers a comprehensive suite of financial products and services, encompassing commercial and retail banking, financial advisory services, and diverse investment solutions. The bank strategically focuses its financial services platform on serving the middle and upper segments of the Mexican population, as well as small and medium-sized enterprises. Furthermore, Banco Santander Mexico provides integrated financial solutions tailored to the needs of large multinational corporations operating within Mexico. As of September 30, 2023, Banco Santander México reported total assets of Ps.1,938 billion and served a substantial customer base exceeding 20.4 million. Headquartered in Mexico City, the bank’s extensive network includes 1,343 branches and offices nationwide, supported by a workforce of 26,757 employees.
About IFC
IFC, a member of the World Bank Group, stands as the largest global development institution dedicated to fostering private sector growth in emerging markets. Operating in over 100 countries, IFC leverages its capital, expertise, and global influence to cultivate markets and opportunities within developing economies. In fiscal year 2023, IFC committed a record-breaking $43.7 billion in investments to private companies and financial institutions across developing nations. This commitment underscores IFC’s dedication to harnessing the power of the private sector to combat extreme poverty and promote shared prosperity, particularly as global economies navigate complex and compounding crises. For further information, please visit www.ifc.org.
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