Mexico has 118.2 million inhabitants (source: Instituto Nacional de Estadística y Geografía, INEGI, www.inegi.org.mx). According to INEGI, the country has an economically active population of 52.2 million, 83% of whom operate a small or very small enterprise in the informal sector (figures from the end of August 2013).
As of 31 August 2013, the Mexican commercial banking sector consisted of 45 institutions (source: Comisión Nacional Bancaria y de Valores, CNBV, www.cnbv.gob.mx) managing a total loan portfolio of USD 207.91 billion (CNBV). As of the end of 2012 private sector lending totalled USD 219.6 billion, or around 21% of GDP, while bank deposits amounted to USD 211.5 billion, or 21% of GDP (source: The World Bank, http://datos.bancomundial.org/indicador/FS.AST.PRVT.GD.ZS). This low level of formal banking is founded on a general mistrust of banks particularly in the wake of the 1994 crisis and the more recent global financial crisis of 2008/2009. However, the global financial crisis did not have any significant impact on the local banking sector in Mexico, reflecting a strong regulatory environment established after the 1994 crisis.
Remittances constitute a major source of income for Mexico, as many of its citizens live and work in the United States and send money home on a regular basis. In 2012, the total volume of funds received from Mexicans working abroad was around USD 2.24 billion (Banco de México, BANXICO, www.banxico.org.mx). However, only a very small percentage of all incoming remittances are deposited in accounts with banks or other institutions in the formal financial sector.
The banking market in Mexico is competitive, but offers great opportunities. Financial indicators, such as outstanding portfolio to GDP, savings penetration to population data, or branch coverage, consistently rank Mexico well below other advanced economies on the continent and in some cases on a par with the smaller and less developed economies of Central America. Best estimates indicate that as much as 70% of the enterprise sector is underserved with credit, which translates into substantial market potential. Despite the market potential, however, the environment remains a challenging one for financial institutions given the often very difficult security situation and cumbersome court system.
Against this background, ProCredit Holding decided to set up a non-deposit taking finance company to focus on the credit needs of small businesses. ProCredit Mexico started operations in June 2007 in the city of Morelia. As of 31 August 2013, ProCredit México had nine branches in the following cities: Morelia, La Piedad, Guadalajara, Moroleón, León, Celaya, Querétaro, San Juan del Río and Aguascalientes.
In 2013 ProCredit Mexico initiated a process leading to certification as a “Green Enterprise” by the Secretariat of Environment and Territorial Development (source: Secretaría de Medio Ambiente y Desarrollo Territorial, SEMADET, http://semadet.jalisco.gob.mx/s). At the end of October 2013, the head office and branch of Niños Heroes, both located in Guadalajara, will join approximately 40 other enterprises that participated voluntarily in this certification process for environmental compliance.
ProCredit Mexico invests intensively in staff training and development to ensure that clients receive high quality consulting services.