The commercial banking sector needs to recover ground lost to the suppliers that have become the primary credit sources for the small- and medium-sized enterprise (SME) sector, said Roberto Martнnez Martнn, the business director of BBVA Bancomer
Between 1994 and 1999, the banks were hard-pressed to meet the demand for business sector credit, Martнnez said, explaining that other suppliers had filled this void. As a result, banks have forgotten their original objective of financing production and now focus their credit activities on financing sales, he said.
Martнnez went on to say that, by obtaining finance from their sales, SMEs would be able to pay cash for their supplies rather than having to rely on supplier credit (now up to 90 days) and would be able to negotiate lower supplier prices. These savings would offset the cost of the sales finance.
Source: Internet Securities
