WFY’25: Economic developments had significantly influenced Mexican factoring industry

Victor Portillo, Commercial Banking Head of Products at BanCoppel, discusses the latest developments in Mexico’s factoring market in the regional article featured in the most recent edition (2025) of the World Factoring Yearbook (WFY’25).
Below is an excerpt from his brilliant article.

Economic developments in Mexico during 2024 have significantly influenced the factoring industry, particularly concerning payment behaviours, SME dynamics, financing preferences, and the legal landscape. High-interest rates, influenced by the Central Bank’s monetary policies, have further strained cash flows, making it difficult for companies to meet their financial obligations promptly. These conditions have heightened the need for reliable cash flow solutions, positioning factoring as a viable option for businesses seeking to mitigate payment delays and manage credit risks.

On the international arena, Mexico’s economic relationship with the US is undeniably asymmetrical, yet it is also highly interdependent. More than 80 per cent of Mexico’s exports go to the US, comprising about a third of Mexico’s GDP. However, this dependency does not imply an implicit political submission. In highly integrated sectors, such as automobile manufacturing for example, Mexico has responded to US pressure — particularly via the Rapid Response Labour Mechanism of the USMCA (US, Mexico, Canada, Agreement) — by adopting indirect strategies that safeguard its competitiveness while preserving diplomatic flexibility.

At the same time, Mexico is proactively pursuing trade diversification. Through partnerships with Europe, China, and others, the government aims to reduce its over-reliance on the US market. The influx of foreign firms setting up operations in Mexico — particularly from Asia — creates both economic opportunity and diplomatic leverage. The re-election of Donald Trump has reawakened tensions and uncertainties in the complex relationship between Mexico and the US. With renewed promises of strict immigration enforcement and protectionist trade practices and new tariffs imposition, Trump’s administration is likely to apply further pressure on Mexico.

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To read the whole article and 42 other specialist articles and country market reviews, order World Factoring Yearbook here.