Mexico: Moody’s foresees more credit for SMEs and risk appetite after new reform

The agency Moody’s This Wednesday, he predicted more financing for small and medium-sized businesses (SMEs) as well as a greater appetite for risk in Mexico after the new reform to the Securities Market Law.

“In our view, the reforms are positive for credit because they will likely help foster credit markets and banks’ risk appetite, particularly to finance small and medium-sized enterprises,” Moody’s Investors Service said in a comment sent to the media.

The institution referred to the changes to the Securities Market Law that the Mexican Government enacted last week to “consolidate the country as a financial hub.”

The reform will boost competition and dynamism, facilitate access to financing and simplify market entry with more accessible public offers, focusing on medium-sized companies, as explained then by the Undersecretary of the Treasury, Gabriel Yorio.

Moody’s agreed that “The new rules will allow SMEs and brokerage firms to simplify issuance processes and reduce costs and barriers to entry, improving transparency and corporate governance.”

Likewise, he highlighted that “Investors will also have access to new high-yield instruments.”

The agency predicted greater exchange in the country’s two stock institutions, the Mexican Stock Exchange (BMV) and the Institutional Stock Exchange (BIVA).

For now, Moody’s considered “low” the number of issuers, 138, of the BMVwhich is why he highlighted that the reform can double this figure, since more than 100 SMEs will now be eligible to enter the capital markets under the new simplified system.

He also cited that Mexico has more than 4 million SMEs, according to the National Institute of Statistics and Geography (Inegi), but loans to these companies only represent 6.6% of the bank’s credit portfolio and is only equivalent to 2.3% of the product. gross domestic product (GDP), compared to 10% in Brazil.