Around 120 percent of all B2B (between companies) transactions in LATAM are paid with credit; However, the companies that are selling do not have the facility to offer credit because their cash flow does not allow it and, on the other hand, buyers do not have the money to make purchases without credit. It is a very complex vicious circle. So, many transactions do not materialize and often companies choose to buy a machine or product that is cheaper, but not as efficient to increase their production capacity. They end up buying lower quality raw materials and this affects the end market of consumers. In quality and price.
On the other hand, Mexico has more than 1,700 financial entities and they all lend at different interest rates based on the efficiency of their operations and the cost of obtaining the capital to lend. Because there are so many entities, many Mexican businessmen do not have much financial knowledge, there is no transparency, and the fees they charge can be exorbitant and almost fraudulent. Many of these financial entities have old-fashioned systems and ways of working, so it is very difficult for them now to reach new customers. Their traditional model of getting clients is almost bankrupt due to the pandemic, but they have capital that they want to lend to help companies.
There is a solution for everyone
Avoid market friction and promote fluidity with B2B digital financing. This is the solution, that financial companies in LATAM begin to grant credit to SMEs with 21st century methods. In the US, it is already happening with some digital platforms such as Behalf which is financing small and medium-sized companies after a brief analysis and is proving to be a success. Companies buy inputs or services from other companies. This strengthens the economy of the countries. Here in Mexico, hundreds of digital credit platforms have arrived to offer this digitization of B2B financing that is sorely needed to reactivate the economy of companies and the country. Because it solves a fundamental problem. They help place credit to financiers in an identified, filtered way and support many companies that need economic flows to make growth purchases to get out of the post-pandemic crises.
Mexican GDP grew three points in 2022. Recently, it was announced that BMW will invest billions of dollars in an electric car factory in a few months, last-mile logistics is growing by the minute. Good things are coming, what SMEs need is for them to trust us and finance us because customers and brands often save us with payments of up to 180 days after giving them the service. Sad but real. to give it