Mexico | Credit to SMEs in the face of the COVID-19 pandemic.

The incomplete recovery of the components of aggregate demand compared to the period prior to the pandemic does not favor the reactivation of the demand for financing from the SME segment, whose balances have presented heterogeneous dynamics both among sectors and uses of credit.

Key points

• Key points:
• Before the pandemic, credit to SMEs presented a high sector concentration and a portfolio with persistent contractions.
• The mortality of SMEs affected services in a harsher manner, with a fragmentation of economic units parallel to the fall in income and employment.
• Credit for working capital and business credit cards contributed significantly to the real drop in the SME portfolio.
• Lower private consumption and higher interest rates would imply a lag in the recovery of credit to SMEs, with persistent heterogeneity between sectors and destinations.

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