Monday, June 24, 2024

Group says rescue plan assisted 1,200 small businesses

A US $290-million private sector plan to help small businesses through the Covid-19 pandemic has helped more than 1,200 such businesses by paying out US $60 million a month, according to Juan Carlos Ostolaza, the head of CCMX, an organization that supports small businesses.

The program launched on April 26 last year through an alliance between the Mexican Business Council (CMN), an elite organization made up of 60 of Mexico’s largest businesses, and the Inter-American Development Bank as a financing option for 30,000 small businesses that are suppliers to members of the CMN.

Ostolaza is convinced of the program’s value, which gives more favorable lending conditions to small companies than a commercial bank would offer. “Sixty million dollars is being dispersed each month; 1,200 small and medium sized businesses that registered have been financed and supported, mainly in the automotive, telecommunications, food, manufacturing and energy industries.” he said.

President López Obrador criticized the arrangement at the time because it was backed by the Ministry of Finance, which sits on the Inter-American Development Bank’s council.

He was concerned that the government would be required to underwrite the plan, but its authors insisted that was not the case.

The federal government has done virtually nothing to support business through the pandemic for fear of inviting corruption and running up debt.

According to Inegi, the institute of statistics and geography, in 2019 there were more than 6 million companies in the country, 99.8% of which were micro, small and medium sized enterprises, and only 0.2% were large companies.

Source: Milenio (sp)

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