- The European Investment Bank will provide a USD 150 million loan for microenterprises in Mexico
- COVID-19 impacted companies will be supported via NAFIN, one of Mexico’s leading development banks
- The loan is part of the EIB’s response, in close cooperation with the EC, to the COVID-19 epidemic breakout outside the EU.
The European Investment Bank (EIB) has signed a USD 150 million loan with Nacional Financiera (NAFIN), one of Mexico’s leading development banks, to support companies affected by COVID-19 in Mexico. The loan will help to address the working capital and investment needs of Mexican microenterprises affected by the COVID-19 breakout.
NAFIN would channel the EIB supported finance to multiple financial intermediaries, to on-lend the funds to eligible private sector companies. A proportion of the loan will support microenterprises in southern Mexico.
The proposed emergency financing is part of the policy and operational response of the EIB, in close cooperation with the EC, to the COVID-19 epidemic breakout outside the EU.
“Micro, companies sustain the highest proportion of employment in Mexico and are more vulnerable to economic shocks. Therefore, supporting them to tackle the deep effects of the COVID-19 crisis is more important than ever” said EIB Vice-President, Ricardo Mourinho Félix, responsible for Latin America. “We are pleased to join forces with NAFIN to allow Mexican companies access new credit lines to maintain or continue growing their business and thus create jobs at this challenging time. As part of our Team Europe efforts, the EIB remains committed to continue working to boost the inclusive reactivation of the economy in Mexico and across the Latin-American and Caribbean region”, he added.
Carlos Noriega Romero, General Director of NAFIN said: "We are very pleased with the signature of this loan agreement. It will certainly contribute to strengthening Nafin’s core mandate, providing financial support to one of the key sectors of the Mexican economy - microentreprises. It is particularly relevant in the current economic situation due to the COVID crisis. We are looking forward to continuing our collaboration with the EIB".
NAFIN is one of Mexico’s development banks, fully owned by the Mexican government. It’s mission is to contribute to the economic development of the country through facilitating the access of SMEs and entrepreneurs to financing and other services for business development, as well as supporting priority projects of the Federal Government, including clean and renewable energy projects. NAFIN is key to promoting the Mexican government’s policies for expanding economic and social development in Mexico with the primary objective of generating jobs and regional growth by strengthening and modernizing SMEs.
Boosting access to finance for MSMEs has also been identified by the Mexican government as the main tool of their contingency emergency plan, with the overarching objective of reactivating the economy and boosting the economic growth. The project is also fully aligned with the 2019-2024 National Development Plan of Mexico, whereby financing for SMEs is one of the priorities to stimulate private sector development, productivity and achieving overall an inclusive economic development.
The EIB, the Bank of the European Union, is the largest international financial institution in the world and approximately 10% of its lending and financing target is to the benefit of partners outside of the European Union.
The EIB in Latin America
The EIB provides economic support for projects in Latin America by facilitating long-term investment with favourable conditions and by providing the technical support needed to ensure that these projects deliver positive social, economic and environmental results. Since the EIB began operating in Latin America in 1993, it has provided total financing of EUR 8.4bn to support 117 projects in 14 countries in the region.