Monday, June 9, 2014

Global Impact: Banco Santander México Develops Nitch Market for Small-and-Mid-Sized Companies

According to The Latin American Tribune, Banco Santander México said it has obtained a loan from the European Investment Bank (EIB) totaling 2.7 billion pesos ($208 million) that will be used to provide financing for small- and mid-sized businesses in México.

“This financing, the first of its type, has its origin in the broad relationship that Santander has in Spain with the EIB for financing” small-and-mid-sized businesses, Banco Santander México said in a statement.

The EIB is looking to support other Santander units in Latin America, where Santander has staked out a position as the “number one bank focusing on small-and mid-sized businesses,” the bank said.

COMMENT:  Banco Santander México is to be congratulated for  its creativity in developing such a lucrative product relative to the Mexican market, particularly using the EIB has a funding vehicle.

The funds will be used to back nearly 1,000 Mexican small-and mid-sized businesses with different types of credit products, Banco Santander México emphasized.

Small- and mid-sized businesses account for 99% of the enterprises, 52% of the gross domestic product and 72% of the jobs in México, Banco Santander México emphasized.

Lending to small-and-mid-sized businesses grew 29% in the first quarter of 2014, accounting for 11% of all loans, the bank said.

Banco Santander México estimates that there are roughly 60,000 small-and-mid-sized business enterprises employing nearly 380,000 people as its customers across México.

The EIB provides financing within the European Union (EU) and for projects in other regions of the world.