Institutional Program 2020-2024 of Nacional Financiera, National Credit Society, Development Banking Institution

DOF: 12/28/2020

INSTITUTIONAL PROGRAM 2020-2024 OF NACIONAL FINANCIERA, NATIONAL CREDIT SOCIETY, DEVELOPMENT BANKING INSTITUTION

A seal with the National Coat of Arms is placed at the margin, which reads: United Mexican States.- TREASURY.- Ministry of Finance and Public Credit.- Nacional Financiera.- Development Banking.

NACIONAL FINANCIERA, SOCIEDAD NACIONAL DE CRÉDITO, INSTITUCIÓN DE BANCA DE DESARROLLO

• INSTITUTIONAL PROGRAM

The General Director of Nacional Financiera, Sociedad Nacional de Crédito, Institución de Banca de Desarrollo, based on the provisions of articles 23, fraction II, of the Organic Law of Nacional Financiera and 23, fraction II, of the Organic Regulations of Nacional Financiera, Sociedad Nacional de Crédito, Institución de Banca de Desarrollo, and in compliance with the agreement adopted by the Board of Directors in its session held on September 4, 2020, through which it approved its Institutional Program, based on the provisions of article 2 of the Organic Law of Nacional Financiera; in articles 17 and 24 of the Planning Law; 47, 48 and 49 of the Federal Law of Parastatal Entities; 9 of the Organic Law of the Federal Public Administration, and in concordance with the goals and strategies established in the National Development Plan 2019-2024 (NND) and in the National Program for Development Financing 2019-2024 (PRONAFIDE); and article 17, fraction II of the Planning Law, which states that parastatal entities must prepare their respective institutional programs, under the terms provided precisely in that Law, the Federal Law of Parastatal Entities or, in its case, by the provisions that regulate its organization and functioning, attending to the provisions contained in the corresponding sectoral program, observing in what is relevant the respective environmental, economic, social and cultural variables, has deemed it appropriate to publish the following:

INSTITUTIONAL PROGRAM 2020-2024 OF NACIONAL FINANCIERA, NATIONAL CREDIT SOCIETY, DEVELOPMENT BANKING INSTITUTION

INSTITUTIONAL PROGRAM DERIVED FROM THE NATIONAL DEVELOPMENT PLAN 2020-2024

1.- Index 2.- Legal basis for the preparation of the program 3.- Acronyms and abbreviations 4.- Origin of resources for the implementation of the Program 5.- Analysis of the current state 6.- Priority objectives 6.1.- Relevance of Priority Objective 1: Contribute to economic development and promote regional development through financing to companies whose activities are aligned with priority sectors and/or the productive vocations of each State. 6.2.- Relevance of Priority Objective 2: Promote the strengthening of local supply chains through financial support to companies, mainly SMEs, so that they can insert themselves into national and global value chains. 6.3.- Relevance of Priority Objective 3: Promote greater penetration of credit in the private sector, with special emphasis on SMEs. 6.4.- Relevance of Priority Objective 4: Provide training and technical assistance to SMEs and non-bank financial institutions with the aim of increasing the penetration of credit in the private sector. 6.5.- Alignment of the Priority Objectives of the NAFIN Institutional Program 2020-2024 with the National Program for Development Financing 2020-2024 7.- Priority strategies and specific actions 8.- Goals for well-being and Parameters 9.- Epilogue: Vision for the future

2.- Legal basis for the preparation of the program

The Institutional Program of NAFIN is supported by the provisions of article 2 of its Organic Law; in articles 17 and 24 of the Planning Law; 47, 48 and 49 of the Federal Law of Parastatal Entities; 9 of the Organic Law of the Federal Public Administration, and in concordance with the goals and strategies established in the National Development Plan 2019-2024 (NND) and in the National Program for Development Financing 2019-2024 (PRONAFIDE).

Article 17, fraction II of the Planning Law states that parastatal entities must prepare their respective institutional programs, under the terms provided precisely in that Law, the Federal Law of Parastatal Entities or, in its case, by the provisions that regulate its organization and functioning, attending to the provisions contained in the corresponding sectoral program, observing in what is relevant the respective environmental, economic, social and cultural variables.

For its part, article 24 establishes that the institutional programs that parastatal entities must prepare will be subject to the provisions contained in the NND and in the corresponding sectoral program, which for the case of NAFIN is PRONAFIDE.

Likewise, article 48 of the Federal Law of Parastatal Entities provides that the Institutional Program constitutes the assumption of commitments in terms of goals and results that the entity must achieve.

The decree containing the National Development Plan 2019-2024, published in the Official Gazette of the Federation on July 12, 2019, establishes the guiding principles and guidelines that will govern the policies and actions of the Federal Executive, as well as of the departments and entities that make up the Federal Public Administration.

The guiding axes that motivate the National Development Plan 2019-2024 are:

• Honesty and integrity
• No to a rich government with a poor people
• Beyond the law, nothing; above the law, no one
• Economy for well-being
• The market does not replace the State
• For the good of all, first the poor
• Leave no one behind, leave no one out
• There can be no peace without justice
• Respect for the rights of others is peace
• No more migration due to hunger or violence
• Democracy means the power of the people
• Ethics, freedom, trust

These principles are the points of the new national consensus, which has as its center the conviction that national activity as a whole - the economic, the political, the social, the cultural - should not be oriented towards reaching other countries, multiplying irrationally and uncritically production, distribution and consumption, beautifying indicators and much less concentrating wealth in a few hands, but towards the well-being of the population.

In this sense, the NND 2019-2024 divides its policies and guidelines into three fundamental themes: Policy and Government; Social Policy and Economy, all aligned to generate well-being for the population, eradicating corruption, triggering economic growth of the country, promoting regional development and reactivating the economy and the internal market.

The Institutional Program of NAFIN 2020-2024 was prepared under the Criteria for preparing, reviewing, approving and following up on programs derived from the NND 2019-2024, and in line with the principles and strategies to promote an inclusive development of the financial system contained in said Plan, in PRONAFIDE and in the NAFIN Strategy 2020-2024.

3.- Acronyms and abbreviations

CONACYT: National Council of Science and Technology DARPA: Defense Advanced Research Projects Agency USA: United States of America ENAPROCE: National Survey on Productivity and Competitiveness of Micro, Small and Medium Enterprises GATT: General Agreement on Tariffs and Trade R+D+i: Research, development and innovation FDI: Foreign Direct Investment IFB: Banking Financial Intermediaries IFNB: Non-Banking Financial Intermediaries SMEs: Micro, Small and Medium Enterprises NAFIN: Nacional Financiera S.N.C. NSF: National Science Foundation OECD: Organization for Economic Co-operation and Development GDP: Gross Domestic Product NND: National Development Plan PRONAFIDE: National Program for Development Financing PME: Small and Medium Enterprise SOFOM: Multiple Object Financial Society USMCA: Treaty between Mexico, United States and Canada NAFTA: North American Free Trade Agreement

4.- Origin of resources for the implementation of the Program

All the actions considered in this Program, including those corresponding to its Priority Objectives, Priority Strategies and Specific Actions, as well as the inter-institutional coordination work for the implementation or operation of said actions and the follow-up and reporting of the same, will be carried out against the authorized budget of the participating spending executors in the Program, while it is in force.

5.- Analysis of the current state

In the eighties, Mexico began the implementation of an economic policy based on commercial opening, with which it sought to promote industrial development through the transfer of technology coming from foreign direct investment (FDI).

The economic policy of these years privileged a macro-stabilizer approach, which sought industrial development through technology transfer linked to investment and market development; through the process of learning through trade in comparison with Asian economies that applied a model of learning by doing.

Although this model brought with it various achievements of great relevance for the country, such as: the development of the automotive and aerospace industry, moving from a model of oil exports to one of manufactured exports and being one of the world's largest exporters, these results have not been sufficient and have contrasting results in areas such as: commercial opening, development of national companies, competitiveness, productivity, integration of the Mexican industry into global value chains and in regional development.

Through this policy, Mexico managed to consolidate itself as a relevant actor on the international scene, becoming one of the productive and logistical poles in the world.

In 2019, the country positioned itself as the tenth largest exporter in the world, while in 2018 it occupied the thirteenth position as the largest economy in the world. In 2019 the country consolidated itself as the second supplier of advanced technology goods (ATPs by its acronym in English) of the USA and as the main exporter of manufactures in the region, contributing with more than 60% of this item in all of Latin America.

Among other positive effects of this opening we find the growing and constant flows of foreign direct investment that the country has received, which in turn are associated with benefits such as technology transfer, the adoption of best practices, training and the establishment of new industries in the country.

Despite the achievements, this policy has been insufficient to promote the growth of the national economy to its maximum potential, as well as to reduce income inequality in society and create a more prosperous Mexico due to results related to the disarticulation of productive chains, disconnection between foreign companies and the national economy, which is reflected in the low aggregate level of exports and the low competitiveness of our exports compared to those of Asian countries such as China; the hyperconcentration of exports, low levels of technological capacity creation and, in the long term, the loss of competitiveness to attract FDI with respect to other regions of the world.

Thus, the implementation of the model of commercial opening and maquiladora allowed the industrialization of some areas of the country, such as the northern border region and the Bajío, through the attraction of Foreign Direct Investment (FDI) in certain productive sectors. The gradual increase in investment promoted the development of industrial corridors in low-technology sectors at first, which in subsequent decades became high-technology sectors. However, this model has found a limit in its degree of national integration, mainly due to the low level of technology transfer and the marginal growth in the capacities of the workforce that operates under this scheme. One of the main reasons for this failure was the lack of an industrial policy that complemented this commercial opening and promoted the development and competitiveness of national companies, which should have provided them with the tools to be more competitive and productive on the eve of a globalized world. As a consequence of this absence of an industrial policy we find: i) low local productive linkage; ii) little linkage between Mexican and foreign companies located in the country; iii) low levels of national content in manufactured exports; iv) a lag in productive competitiveness; v) high levels of national inequity; vi) incipient investment in Research, Development and Innovation (R+D+i) activities.

In the face of the limitations of the commercial opening policies applied in previous years, one of the central tasks of the current government is to strengthen the internal market, through sectoral programs, regional projects and infrastructure works, but also by facilitating access to credit for SMEs in an inclusive manner. This will generate a salary recovery policy and a strategy for the massive creation of productive, permanent and well-paid jobs.

Local Productive Linkage

The production of goods in Mexico, especially that destined for export, is characterized by having a low level of national content, which barely amounts to 25% of the total value of the goods, and a high dependence on imported intermediate inputs (76% of imports). Adding to this, we find an incipient participation by SMEs in value chains, which amounts to 4.6%. (1)

Given the focus of an industrial policy focused on technology transfer through the attraction of FDI and a limited vision regarding the development and strengthening of local industry, commercial opening generated a polarization of productive activity in which foreign companies have a comparative advantage over local ones; this situation is leaving out a large number of local companies and over time the gap in terms of productivity and competitiveness is increasing.

The most dynamic industrial activities in the country, the auto parts sector and the electrical-electronic sector, are characterized by having high export volumes, but little capacity to incorporate national suppliers. In the case of the automotive sector, the local content of exports amounts to 10%, while the electronic sector only reaches 6%. Based on these data we observe that the benefit in the growth of these industries has a low impact on the development of the country.

There are various factors that limit the insertion of companies into global value chains, among these stand out: i) lack of information; ii) quality problems; iii) scalability problems; iv) financing problems; v) low level of professionalization of companies, vi) low levels of innovation and technological adoption.

It is relevant to mention that a large proportion of national entrepreneurs start their businesses empirically and with limited or null managerial knowledge. Most of them have not received training in business matters, and therefore do not have the tools to identify and value the opportunities that present themselves to them, evaluate market viability, prepare a business plan, establish performance indicators and obtain financing to maintain the growth of the company (2).

In addition to the above, other factors that add to the low productive linkage are the low levels of training, the low levels of technological adoption, the disconnection of companies with research centers, the scarce certification in international standards - with which Mexican companies could be world-class suppliers - and the low investment in R+D+i activities.

A large number of national companies do not find added value in these activities. Also, according to the ENAPROCE 2018, 52% of SMEs do not acquire, adapt, generate, patent, develop or sell technology. Of the SMEs that do, 26% generate or develop their own technology for exclusive use of the company, and only 9% patent the products or technologies developed. Between 2016 and 2017, only 13% of SMEs introduced some type of innovation to the market.

The opportunity that Mexico has in productive linkage, only from the point of view of the industrial market, amounts to 352 billion dollars (mmdd), which was what the country imported in intermediate goods in 2019. In terms of GDP, the Mexican industrial market is worth almost the same as the GDP of Denmark (356 mmdd). (3)

In this sense Mexico has one of the largest and most attractive industrial markets in the world. This situation puts national companies in a privileged position since they have direct access to the opportunities emanating from global foreign trade.

Although Mexican industrial regions presented an acceptable level of development during the last decades, continuing with models that are based on advantages such as low-cost labor and exemptions in trade tariffs, puts at high risk the possibility of increasing the degree of competitiveness and progress of the Mexican industry.

For a decade, the evolution of production and changes in trade; specifically the digitalization of trade, commercial regionalization (nearshoring), and the growth of emerging markets, have impacted the level of development of productive regions.

More so, investment decisions and the location of production plants are increasingly subordinated to the advantages that regions can offer in terms of specialized labor, development of automated and controllable production systems in real time; advantages in the logistical handling of production; and in levels of productivity, among others.

Therefore, financing, training and technical assistance are fundamental to strengthen Mexican companies, especially SMEs, the implementation of ad hoc programs to the needs of the companies will be vital so that they can increase their competitiveness and productivity.

In complement to these actions, the linkage with tractor companies, local and international, will allow us to identify business opportunities, the standards and requirements of the companies and based on this establish productive linkage and technological development programs that allow integrating a greater number of companies into value chains.

Productivity

In the last decades, the economic growth of Mexico has been located at very low levels, compared to emerging countries with similar characteristics. Between the year 2000 and 2017, the productivity of the factors of Mexico had an average annual drop of 0.9%. In contrast to the member countries of the OECD, Mexico presented one of the lowest levels of variation, placing itself in position 43 of 45, in the ranking published by the OECD in 2017 (3).

In this same line, in an analysis carried out by McKinsey Group, it was identified that the drop in national productivity is led by SMEs, while large companies have presented an advance in this rubric in recent years. Thus, the advance in productivity is driven by large multinational companies with presence in Mexico, while local companies showed a considerable lag in the matter (4).

The productivity problem is magnified at the level of SMEs, which present a great difference, which is constantly growing, with respect to large companies. In 2003 the productivity of large companies was on average 3.5 times greater than the productivity of SMEs.

MiPyMEs,

while

in

2013

it

is

already

4.9

times

larger.

MiPyMEs

are

the

main

generators

of

employment

at

the

national

level

and,

therefore,

of

the

income

of

the

majority

of

Mexican

families.

This

is

why

this

situation

is

of

great

importance

for

the

Mexican

economy

and

for

the

well-being

of

its

population

(5).

Among

the

main

causes

of

this

delay,

particularly

in

MiPyMEs,

we

have

identified:

i)

low

levels

of

technological

adoption;

ii)

low

levels

of

human

capital

training;

iii)

lack

of

performance

indicators

that

allow

measuring

efficiency;

iv)

lack

of

information

that

allows

them

to

make

decisions

or

identify

new

opportunities;

v)

limited

managerial

skills.

These

factors

have

a

direct

impact

on

the

survival

and

growth

of

MiPyMEs;

among

the

most

common

reasons

for

closure

of

these

are

failures

such

as:

i)

incorrect

pricing;

ii)

confusion

in

sales;

iii)

cash

leaks

or

shrinkage.

All

these

factors,

which

imply

the

death

of

70%

of

MiPyMEs

before

reaching

5

years

of

age,

could

be

avoided

by

investing

in

information

technologies

in

the

company

(6).

All

the

points

mentioned

above

are

of

great

importance

to

increase

the

lifespan

of

MiPyMEs

and

ensure

their

growth,

but

among

these,

technological

adoption

and

training

are

the

ones

that

have

the

greatest

impact

on

company

productivity,

as

these

factors

promote

efficiency

in

internal

processes,

reduce

errors,

and

generate

new

business

opportunities.

In

Mexico,

simple

and

practical

solutions

are

required

that

are

within

reach

of

the

most

lagging

sectors,

such

as

MiPyMEs,

to

reduce

costs

and

provide

support

in

the

implementation

of

information

technologies

and

related

training.

Financial

Sector

The

financial

sector

is

an

essential

generator

of

economic

growth

in

any

country,

as

it

links

savings

and

investment

with

productive

projects.

An

efficient

and

well-structured

financial

system

allows

resources

to

be

mobilized

better

and

increases

the

productivity

of

investment

(7).

Particularly,

the

banking

system

is

associated

with

economic

development

and

growth,

as

it

is

extensive

and

covers

the

needs

of

various

actors

and

incentivizes

the

efficient

channeling

of

resources.

However,

the

role

of

commercial

banking

in

developing

countries

is

especially

limited,

which

restricts

access

to

credit

for

a

significant

sector

of

the

population,

especially

MiPyMEs.

The

Mexican

financial

system,

despite

its

strengths

in

terms

of

capitalization

and

liquidity,

fails

to

increase

its

level

of

penetration

among

the

population,

while

failing

to

satisfy

the

financing

needs

required

by

companies,

especially

MiPyMEs,

for

the

development

of

the

country.

A

clear

example

is

the

low

penetration

of

credit

to

the

private

sector

as

a

percentage

of

GDP,

which

only

represented

36%,

whereas

in

similar

countries

it

rises

to

48%

and

in

advanced

countries

it

exceeds

145%.

Financial

inclusion

in

Mexico

presents

one

of

the

lowest

levels

internationally,

including

one

of

the

lowest

in

Latin

America

and

the

Caribbean,

despite

being

the

second

largest economy

in

the

region.

The

low

penetration

of

credit

in

the

private

sector

is

due

to

various

factors

such

as:

i)

insufficient

access

channels;

ii)

low

levels

of

financial

literacy;

iii)

high

levels

of

informality;

iv)

high

risk

aversion

on

the

part

of

financial

institutions;

v)

high

financing

costs;

vi)

lack

of

trust

in

financial

institutions;

to

name

a

few.

Credit

penetration

is

more

limited

in

MiPyMEs,

as

reflected

by

the

balance

and

number

of

companies

served

by

the

financial

sector

relative

to

the

total.

The

problems

are

the

same

but

on

a

larger

scale,

as

due

to

the

risk

they

represent,

the

cost

of

accessing

credit

is

higher.

In

addition,

if

we

add

the

factor

of

company

eligibility,

the

majority

of

MiPyMEs

are

not

subjects

for

credit,

with

the

lack

of

collateral,

guarantee,

or

guarantor

being

the

main

reason.

This

problem

has

been

partially

resolved

by

SOFOMES.

60%

of

Mexican

companies

receive

their

first

credit

from

a

SOFOM,

not

from

a

bank.

It

is

important

to

highlight

that

SOFOMES

contribute

with

25%

of

national

credits

(8).

The

relevance

of

Non-Bank

Financial

Intermediaries

(IFNB),

and

especially

SOFOMES,

as

strategic

partners

of

development

banking

is

essential

to

boost

credit

penetration

in

the

country

and,

thereby,

reach

regions

with

low

or

no

presence

of

Banking

Financial

Institutions

(IFB).

The

role

of

Development

Banking

in

the

penetration

of

credit

to

the

private

sector

is

vital,

as

it

contributes

with

30%

of

commercial

credit

and,

through

guarantees,

with

approximately

65%

of

the

credits

granted

to

MiPyMEs

(9).

This

scenario

demands

greater

impulse

to

credit

penetration

in

the

private

sector

and

to

the

financial

inclusion

of

MiPyMEs,

with

specific

actions

by

Development

Banking

that

address

the

factors

mentioned

previously.

Thus,

we

can

increase

access

to

financial

products

and

services

and

ensure

they

serve

as

tools

that

boost

the

growth

and

sustainability

of

Mexican

companies,

with

particular

emphasis

on

MiPyMEs

and

groups

unattended

by

the

financial

sector

throughout

the

country.

Securities

Market

The

securities

market

in

Mexico

has

not

managed

to

consolidate

as

a

relevant

alternative

source

of

financing

for

companies

and

productive

projects

in

the

country.

The

securities

market

is

an

instrument

that

allows

channeling

excess

financial

resources

in

an economy

toward

productive

projects

developed

by

companies

and,

in

some

cases,

by

governments.

The

greater

the

number

of

listed

companies,

and

the

greater

the

marketability

and

projects,

the

better

the

productivity

and

economic

growth.

This

will

allow

a

greater

volume

of

capitals

to

be

invested

in

the

country,

such

that

the

wealth

generated

in

Mexico

does

not

leave

to

international

markets,

contributes

to

generating

more

wealth

within

the

country,

and

attracts

foreign

capital

that

in

turn

will

inject

fresh

money

into

the

national economy.

However,

the

number

of

companies

listed

on

the

Mexican

securities

market

is

scarce,

especially

if

we

consider

that

it

is

the

thirteenth

largest economy

in

the

world

and

that

the

country

is

part

of

the

exclusive

club

of

countries

with

a

GDP

equal

to

or

exceeding

one

trillion

dollars.

Currently,

there

are

146

companies

listed

on

the

BMV,

an

incipient

amount

if

we

compare

it

with

other

emerging

markets,

such

as

Chile,

with

285

companies,

India

with

6,989,

and

Indonesia

with

619.

The

securities

market

serves

as

one

of

the

thermometers

of

the

national economy,

showing

the

perception

of

specialized

analysts

in

Mexico

and

abroad.

This

reflects

to

some

extent

the

limited

economic

growth

of

the

country

in

the

last

decades.

From

1998

to

2018,

the

number

of

listed

companies

saw

a

decrease

of

26%,

going

from

195

companies

in

1998

to

145

in

2018.

The

causes

for

the

de-listing

of

these

companies

are

diverse,

among

which

we

find:

acquisition

by

another

company,

share

repurchase

by

shareholders,

and,

in

the

most

unfortunate

cases,

companies

with

poor

performance

or

financial

problems

or

that

even

went

bankrupt.

In

Mexico,

only

1%

of

large

companies

are

listed

on

the

stock

exchange,

and

if

this

is

compared

to

the

total

number

of

companies

in

the

country,

the

figure

is

minimal.

The

relevance

of

participating

in

the

securities

market

transcends

its

main

objective

of

accessing

a

competitive

source

of

financing

under

favorable

conditions.

For

companies,

entering

the

securities

market

implies

the

implementation

of

a

solid corporate governance

and,

thereby,

being

able

to

enjoy

various

benefits

such

as:

i)

ensuring

the

continuity

of

the

company

over

time,

especially

in

the

case

of

large

family

companies;

ii)

accessing

new

business

opportunities

in

the

local

and

international

market;

iii)

strengthening

the

base

of

strategic

partners;

among

others.

Currently,

NAFIN

has

a

strategic

line

and

a

financial

product

designed

exclusively

to

increase

the

number

of

companies

listed

on

the

securities

market.

With

this,

it

is

sought

to

have

a

greater

number

of

companies

at

a

higher

level

of

professionalization

and

that,

in

turn,

they

serve

as

an

example

and

as

drivers

for

their

suppliers,

thus

leading

the

national

business

base

to

unprecedented

professionalization

in

the

country.

NAFIN

Strategy

2020-2024

NAFIN

is

a

solid

financial

institution

whose

purpose

is

to

contribute

to

national economic

growth

by

boosting

the

development

of

national

companies.

It

achieves

this

through

a

wide

offer

of

financial

products,

as

well

as

training

and

technical

assistance

in

various

areas

of

business

and

productive

activities.

Likewise,

it

is

an

institution

whose

efforts

are

oriented

toward

the

implementation

of

Mexico's

economic-industrial

policy,

closing

existing

financing

gaps

in

the

national

financial

system,

creating

new

markets

that

positively

impact

the

national economy,

boosting

financial

inclusion,

and

attending

to

sectors

and

groups

that

face

greater

limitations

in

accessing

credit.

Based

on

the

NPD

2019-2024

and

the

PRONAFIDE

2020-2024,

the

NAFIN

Institutional

Program

2020-2024

has

the

objective

of

contributing

to

the

sustainable economic

development

of

the

country

through

the

boost

to

micro,

small,

and

medium-sized

enterprises

in

the

country,

under

the

principles

of

austerity,

honesty,

and

combat

to corruption

that

characterize

the

commitments

of

the

Government

of

Mexico.

To

achieve

this,

NAFIN

is

committed

to

the

efficient

and

sustainable

use

of

resources,

as

well

as

to

the

generation

of

means

and

human capabilities

to

guarantee

the

country's

objectives

in

this

area.

To

boost

economic

development,

the

NAFIN

Institutional

Program

2020-2024

establishes

the

institution's

strategy

and

lines

of

action

that

will

allow

financing

and

articulating,

jointly

and

in

collaboration

with

other

government

institutions,

the

country's economic

and

industrial

policy.

The

lines

of

action

were

designed

with

the

purpose

of

having

a

positive

impact

on

investment,

productivity,

innovation,

and

growth

through

the

strengthening

of

Mexican

companies

via

access

to

financing,

training,

and

technical

assistance,

with

special

emphasis

on

sectors

and

groups

that

face

greater

limitations

in

accessing

these.

The

strategy

adopted

by

NAFIN

for

the

period

2020-2024

is

focused

on

three

major

axes:

i)

promotion

of

national

industrial

development

focused

on

productive

sectors;

ii)

boost

to

regional

development

based

on

the

productive

vocations

of

each

region;

and

iii)

boost

and

support

for

priority

economic

projects

of

the

Federal

Government.

All

axes

have

the

same

relevance,

and

it

is

important

to

highlight

that

they

present

various

points

of

convergence,

such

as

financing

to

MiPyMEs

and

productive

linkages,

to

name

a

few.

The

sectoral

focus,

due

to

its

nature,

is

more

diverse,

as

not

all

priority

sectors

have

regional

presence

and/or

are

not

preponderant

in

the

vocations

of

the

states.

This

axis

in

particular

has

the

objective

of

stimulating

the

placement

of

financial

products

that

develop

better

companies

that

generate

more

jobs

and

better

remuneration,

with

a

special

emphasis

on

the

South-Southeast

zone

of

the

country.

The

main

lines

of

action

of

this

strategy

are

the

following:

-

Boost

the

integration

of

a

greater

number

of

national

companies,

primarily

MiPyMEs,

into

value

chains

and,

thereby,

be

able

to

increase

the

national

content

of

exports;

-

Stimulate

the

investment

of

national

companies

in

projects

focused

on

the

production

of

consumer

goods

and

intermediate

goods

with

the

purpose

of

reducing

the

dependency

on

foreign

suppliers;

-

Contribute

to

the

development

of

the

energy

sector

through

support

for

its

national

suppliers,

with

special

emphasis

on

MiPyMEs;

-

Foster

regional

economic

development

through

financial

products

focused

on

companies

that

are

in

concordance

with

the

particular

productive

vocations

of

each

State;

-

Support

national

companies

that

are

suppliers

to

the

federal

government,

especially

MiPyMEs

with

activities

related

to

the

major

infrastructure

projects

of

the

term;

-

Boost

regional

growth

through

the

development

of

infrastructure

and

tourist

services,

as

well

as

the

strengthening

of

their

value

chain;

-

Promote

economic

development

through

financial

inclusion

with

special

emphasis

on

MiPyMEs

and

sectors

with

limited

access

to

credit;

-

Incentivize

technological

adoption

in

Mexican

companies;

-

Stimulate

the

investment

of

national

companies

in

R&D+i

activities;

-

Stimulate

the

growth

and

penetration

of

credit

to

MiPyMEs

through

Regional

Banks

and

Non-Bank

Financial

Intermediaries

aligned

with

the

objectives

of

the

institutions;

-

Boost

the

manufacturing

of

capital

goods

in

Mexico,

both

for

the

national

and

international

market.

First

Axis:

Strategic

and

Technological

Sectoral

Development

This

first

axis

seeks

to

boost

the

development

of

26

productive

subsectors,

considering

both

traditional

sectors

and

high-technology

sectors.

These

sectors

were

selected

based

on

the

following

criteria:

-

Traditional:

Value

of

exports

and

imports

exceeding

2,000

million

dollars,

national

content

lower

than

45%,

and

level

of

drag

on

other

economic

sectors.

-

High

Technology:

Capacity

to

generate

competitive

advantages

in

the

national

industrial

sector,

capacity

to

provide

tools

that

allow

generating

own

technology

at

the

national

level;

a

high

inter-sectoral

impact

and

generation

of

quality

jobs.

Under

these

criteria,

the

selected

sectors

were

the

following

(10):

This

axis

will

be

articulated

through

the

development

of

local

companies

with

the

purpose

of

allowing

them

to

become

suppliers

to

tractor

companies,

national

and

foreign

with

presence

in

the

country.

Based

on

these

actions,

we

will

contribute

to

productive

linkages,

to

import

substitution

in

areas

where

the

country

is

competitive,

to

increase

the

local

content

of

exports,

and

above

all

to

strengthen

the

national

industrial

landscape.

Likewise,

through

this

support,

investment

in

the

adoption

of

new

technologies,

training,

and

R&D+i

activities

will

be

stimulated.

In

addition

to

the

benefits

mentioned

above,

support

for

High

Technology

sectors

generates

a

series

of

positive

externalities

such

as

the

transfer

of

technology

and

knowledge

from

activities

with

high

rates

of

productivity

and

performance,

increases

the

level

of

the

labor

force,

and

reduces

the

technological

dependency

we

have

with

other

countries.

Finally,

various

OECD

studies

indicate

that

investment

in

technology

and

innovation

sectors

contributes

with

nearly

three

quarters

of

GDP

growth

in

advanced

economies

during

the

last

decade.

Second

Axis:

Regional

Development

Given

the

inequality

in

economic

and

industrial

development

of

the

different

regions

of

the

country

and

with

the

purpose

of

boosting

economic

growth

in

all

States,

the

second

axis

of

the

strategy

focuses

on

fostering

economic

growth

through

financing

the

productive

vocations

of

each

of

the

States,

especially

in

those

where

the

presence

of

priority

sectors

is

incipient.

In

this

axis,

special

emphasis

will

given

to

the

development

of

the

South-Southeast

of

the

country,

to

boost

the

growth

of

the

regional economy

with

full

respect

for

its

history

and

culture.

This

pillar

will

be

reinforced

with

the

establishment

of

strategic

regional

projects

consistent

with

local

vocations,

jointly

with

industry

and

local

governments,

and

with

the

strategic

projects

of

the

federal

government.

Within

these

strategic

projects,

we

seek

to

boost

those

that

increase

productive

linkages,

preferably

in

industrial

sectors.

Third

Axis:

Boost

to

Priority

Projects

of

the

Federal

Government

The

Federal

Government

defined

a

series

of

priority

projects

for

economic

development

for

the

country

such

as:

the

Maya

Train,

the

Dos

Bocas

Refinery,

the

Felipe

Ángeles

Airport,

projects

for

the

development

of

the

northern

border

and

the

South-Southeast

region

of

the

country,

as

well

as

other

port

infrastructure

projects,

border

bridges,

and

communications

throughout

the

country.

In

addition

to

these,

the

strengthening

of

the

energy

sector,

the

development

of

the

South-Southeast,

and

the

implementation

of

the

USMCA

stand

out.

In

this

axis,

NAFIN's

actions

will

focus

on

providing

financial

support

for

the

development

of

these

projects

in

various

areas

such

as:

financing

for

suppliers

of

these

projects,

with

a

special

focus

on

suppliers

of

the

energy

sector

and

on

MiPyMEs;

strengthening

companies

so

they

can

comply

with

the

new

rules

of

origin

of

the

USMCA;

stimulating

the

investment

of

local

and

international

companies

in

the

South-Southeast

region.

The

articulation

of

NAFIN's

strategy

will

be

carried

out

through

the

following

actions:

-

First-tier

financing

in

congruence

with

industrial

and

regional

development

expressed

in

the

strategy;

-

Design

of

guarantee

programs

in

concordance

with

the

bank's

risk

appetite

and

profile;

-

Training

and

certification

for

potential

Non-Bank

Financial

Intermediaries

(IFNB);

-

Institutional

promotion

at

the

state

and

regional

level

focused

on

priority

sectors

and

regional

vocations;

-

Establishment

of

cooperation

networks

with

federal,

state,

and

municipal government

dependencies,

whose

activities

directly

influence

the

strategy

and

objectives

of

the

banks,

and

-

Strategic

alliances

with

chambers,

associations,

and

private

sector

organizations

at

the

federal

and

state

level.

Likewise,

NAFIN

will

seek

to

enhance

its

credit

processes

and

customer

identification

through

Financial

Technologies

(FinTech),

specifically

in

3

different

ways:

1.

Be

able

to

foresee

the

needs

of

the

companies

that

visit

us

regarding

training,

requirements,

and

credit

limits

or

financial

health

indicators.

2.

Derive

them

in

an

extended

schedule,

preferably

24/7,

to

any

of

the

three

solutions

mentioned

above.

3.

Adjust

and/or

promote

new

mechanisms

for

the

granting

of

online

financing.

And

finally,

generate,

through

the

information

obtained

in

the

processes

mentioned

above,

value

information

that

allows

us

to

have

a

better

understanding

of

the

needs

of

Mexican

MiPyMEs.

FinTechs

are

allowing

access

to

banking

services

that

were

previously

out

of

reach

for

MiPyMEs,

addressing

specific

and

very

different

needs

of

customers

in

traditional

markets;

with

which

it

is

possible

to

boost

financial

inclusion.

Due

to

a

better

understanding

of

customers

through

the

capacity

to

store

and

manage

a

greater

amount

of

information,

the

use

of

FinTech

allows

advanced

data

analysis

combined

with

a

broader

set

of

information

sources,

which

leads

to

better

management

capacity

and

eventually

an

increase

in

the

number

of

qualified

companies.

Under

this

scenario,

the

strategy,

objectives,

and

lines

of

action

of

this

NAFIN

Institutional

Program

2020-2024

are

focused

on

addressing

the

main

problems

that

prevent

sustainable economic

development,

from

the

perspective

of

strengthening

the

internal

market,

increasing

the

national

content

of

manufacturing

production,

growth

of

MiPyMEs,

fostering

productive

linkages

of

local

companies,

strengthening

the

value

chains

of

the

tourism

sector,

as

well

as

boosting

national

suppliers

of

the

energy

sector

and

of

the

priority

projects

of

this

administration

such

as:

the

Maya

Train,

the

Refinery

of

Dos

Bocas,

Dos

Bocas,

the

Felipe

Ángeles

Airport,

the

Interoceanic

Corridor

of

the

Isthmus

of

Tehuantepec,

the

Mexico-Toluca

Train,

development

of

the

northern

border

and

the

South

• Southeast

region,

as

well

as

in

other

port

infrastructure

projects,

border

bridges,

and

communications

across

the country.

With

these

elements,

NAFIN

seeks

to

contribute

to

promoting

a

new

path

toward

development

for

well-being,

through

the

impulse

to

economic

recovery,

the

internal

market,

and

employment,

which

generates

well-being

for

everyone.

This

strategy

highlights

the

role

of

the government

as

a

generator

of

coherent

public

policies

and

as

an

articulator

of

national

purposes.

Linkage

of

the

Priority

Objectives

of

the

NAFIN

Institutional

Program

2020-2024

with

the

National

Development

Plan

2019-2024.

The

actions

established

in

the

NAFIN

Institutional

Program

2020-2024

are

based

on

the

guiding

principles

established

in

the

NND

2019-2024

and

in

the

PRONAFIDE

2020-2024.

In

particular,

the

Program

is

governed

by

the

principles

of

" Economy

for

well-being

" ,

" No

to

a

rich

government

with

a

poor

people

" and

" Do

not

leave

anyone

behind,

do

not

leave

anyone

out

" of

the

NND.

Likewise,

the

NAFIN

Institutional

Program

2020-2024

starts

from

priority

objective

6

of

the

PRONAFIDE

2020-2024

which

seeks

" Expand

and

strengthen

the

financing

and

planning

of

development

banking

and

other

financing

vehicles

of

the

Federal

Public

Administration,

as

well

as

foster

greater

financial

inclusion

of

the

target

sectors

and

greater

participation

of

the

private

sector,

to

contribute

to

the

sustained

economic

development

of

the country

and

to

social

well-being

" ,

specifically,

in

the

priority

strategies

mentioned

below:

6.1.

Promote

access

to

the

financial

services

of

development

banking,

through

financing

schemes

and

programs,

as

well

as

other

financial

products,

that

allow

greater

inclusion

of

its

target

population

that

faces

access

limitations

to

the

formal

private

financial

system.

6.2

Promote

greater

financing

with

the

participation

of

the

private

sector

in

the

priority

sectors

to

contribute

to

national

economic

development.

6.3

Promote

and

facilitate

the

use

and

contracting

of

the

financial

services

and

electronic

transactions

offered

by

development

banking

to

increase

access

for

the

population

and

the

target

sectors.

6.4.

Carry

out

actions

in

the

area

of

financial

education

and

training,

in

order

to

contribute

to

the

efficient

and

responsible

use

of

resources

and

financial

services.

To

address

the

described

problem,

NAFIN

has

designed

four

Priority

Objectives

through

which

it

will

give

attention

seeking

a

positive

impact

through

specific

solutions:

Contribute

to

economic

development

and

promote

regional

development

through

financing

to

companies

whose

activities

are

aligned

with

the

priority

sectors

and/or

the

productive

vocations

of

each

State,

we

will

seek

to

mainly

address

SMEs

with

activities

in

the

priority

sectors,

based

on

the

regional

strategy,

with

which

we

will

achieve

fostering

their

growth,

productivity

and

competitiveness;

and

thus

strengthen

Mexican

SMEs

in

an

inclusive

way.

Promote

the

strengthening

of

local

supply

chains

through

financial

support

to

companies,

mainly

SMEs,

so

that

they

can

insert

themselves

into

national

and

global

value

chains,

with

which

we

will

seek

to

foster

productive

linkages

with

leading

companies

that

carry

out

their

activities

in

the

priority

institutional

sectors

and/or

in

the

regional

productive

vocations

and,

with

which

we

will

achieve

strengthening

the

internal

market.

Promote

greater

penetration

of

credit

in

the

private

sector,

with

special

emphasis

on

SMEs

by

designing

guarantee

programs

in

concordance

with

the

priority

sectors,

regional

vocations

and

priority

projects

of

the

Federal

Government,

and

in

accordance

with

the

appetite

and

risk

profile

of

each

IFB

and

IFNB.

Likewise,

the

reach

of

the

institution

will

be

strengthened

through

the

implementation

of

Fintech

technologies

that

allow

NAFIN's

financial

products

to

reach

SMEs

and

regions

of

the country

to

which

it

is

usually

not

possible

to

reach,

and

thus

promote

financial

inclusion.

Provide

training

and

technical

assistance

to

SMEs

and

non-bank

financial

institutions

with

the

purpose

of

increasing

the

penetration

of

credit

in

the

private

sector,

NAFIN

will

promote

financial

inclusion,

as

well

as

better

practices

that

facilitate

the

growth

of

the

companies

served.

6.-

Priority

Objectives

NAFIN

seeks

to

promote

economic

development

of

the country

through

financing

to

Mexican

companies

whose

activities

are

aligned

with

the

priority

sectors

and/or

the

productive

vocations

of

each

Federative

Entity.

Priority

Objectives

of

the

Institutional

Program

1.-

Contribute

to

economic

development

and

promote

regional

development

through

financing

to

companies

whose

activities

are

aligned

with

the

priority

sectors

and/or

the

productive

vocations

of

each

State.

2.-

Promote

the

strengthening

of

local

supply

chains

through

financial

support

to

companies,

mainly

SMEs

so

that

they

can

insert

themselves

into

national

and

global

value

chains.

3.-

Promote

greater

penetration

of

credit

in

the

private

sector,

with

special

emphasis

on

SMEs.

4.-

Provide

training

and

technical

assistance

to

SMEs

and

non-bank

financial

institutions

with

the

purpose

of

increasing

the

penetration

of

credit

in

the

private

sector.

6.1.-

Relevance

of

Priority

Objective

1:

Contribute

to

economic

development

and

promote

regional

development

through

financing

to

companies

whose

activities

are

aligned

with

the

priority

sectors

and/or

the

productive

vocations

of

each

State.

The

lack

of

a

clear

industrial

policy

has

generated

a

polarization

of

the

country's

productive

activity,

which

is

characterized

by

having

an

atomized

and

uncompetitive

industry,

in

comparison

with

Asian

countries.

Likewise,

the

gains

from

foreign

trade

have

been

reflected

in

few

industries

(such

as

automotive

and

electrical-electronics),

which

are

linked

to

transnational

companies,

but

not

to

local

supply

companies.

Inequity

in

development

also

generated

regional

disparities:

on

one

hand,

we

have

the

north

zone

whose

development

has

been

based

on

industry,

and

on

the

other,

we

see

economic

lag

in

the

south

and

southeast

of

the

nation.

On

the

other

hand,

national

SMEs

have

been

characterized

by

having

low

levels

of

productivity.

Between

the

years

2010

and

2016

the

average

annual

growth

of

company

productivity

was

1% (11)

placing

Mexico

in

place

43

of

45.

SMEs

have

low

productivity,

in

contrast

to

transnational

companies

with

presence

in

Mexico

that

have

higher

rates

in

the

growth

of

their

productivity;

this

is

due

to

issues

such

as

low

corporate

investment,

low

credit

penetration

in

SMEs,

among

others. (12)

Among

the

main

causes

of

this

lag

of

SMEs

with

respect

to

large

foreign

companies

located

in

Mexico,

we

identify

that

the

current

manufacturing

model

is

mainly

an

assembly

model

with

little

added

value

that

does

not

incentivize

productive

linkages

with

national

suppliers

and

has

low

capacity

to

supply

the

national

market

with

final

or

intermediate

goods.

Additionally,

this

model

has

a

low

capacity

for

technology

transfer

to

national

complementary

industries,

the

labor

force

and

a

strong

disconnection

with

the

supply

of

science

and

technology

in

the country.

To

address

this

problem,

there

is

a

strategy

that

seeks

to

address

Mexican

companies

based

on

a

sectoral

model,

according

to

the

priority

sectors

mentioned

previously

and

based

on

the

regional

vocations

of

each

state,

with

the

purpose

of

strengthening

the

areas

where

the country

is

competitive

and

not

leaving

any

company

behind.

This

strategy

considers

the

importance

of

job

creation

and

the

strengthening

of

the

internal

market

to

recover

the

well-being

of

the

population.

6.2.-

Relevance

of

Priority

Objective

2:

Promote

the

strengthening

of

local

supply

chains

through

financial

support

to

companies,

mainly

SMEs,

so

that

they

can

insert

themselves

into

national

and

global

value

chains.

The

boost

to

local

supply

companies

is

vital

so

that

Mexican

companies

can

take

advantage

of

this

market

(which

is

equivalent

to

approximately

25%

of

GDP)

and

can

benefit,

indirectly,

from

foreign

trade,

in

addition

to

making

them

more

competitive

worldwide

and

promoting

the

closing

of

regional

gaps

in

the country.

Although

Mexico

is

the

tenth

largest

world

exporter,

there

is

little

linkage

between

the

national

export

industry

and

the

rest

of

the economy,

especially

in

terms

of

supply

from

Mexican

SMEs.

The

production

of

goods

in

Mexico,

especially

that

destined

for

export,

is

characterized

by

having

a

low

level

of

national

content

(25%

of

the

total

value

of

goods),

and

a

high

dependency

on

imported

intermediate

inputs

(76%

of

imports).

Examples

of

this

are

the

auto

parts

and

electrical-electronics

sectors,

which

are

characterized

by

having

high

export

volumes,

but

little

capacity

to

incorporate

national

suppliers;

therefore,

the

benefit

in

the growth

of

these

industries

has

a

low

impact

on

the

development

of

the country.

There

are

various

factors

that

limit

the

insertion

of

companies

into

global

value

chains,

among

these

stand

out:

i)

lack

of

information;

ii)

quality

problems;

iii)

scalability

problems;

iv)

financing

problems;

v)

low

level

of

professionalization

of

companies. (13)

Financing,

training,

and

technical

assistance

are

fundamental

to

strengthen

Mexican

companies,

especially

SMEs.

The

opportunity

that

Mexico

has

in

productive

linkage,

only

from

the

point

of

view

of

the

industrial

market,

amounts

to

352

billion

USD,

which

was

what

the country

imported

in

intermediate

goods

in

2019.

In

terms

of

GDP,

the

Mexican

industrial

market

is

worth

almost

the

same

as

the

GDP

of

Denmark

(356

billion

USD).

In

this

sense,

Mexico

has

one

of

the

largest

and

most

attractive

industrial

markets

in

the

world.

This

situation

places

national

companies

in

a

privileged

position

since

they

have

direct

access

to

the

opportunities

emanating

from

global

foreign

trade.

To

address

this

challenge,

there

is

a

strategy

that

seeks

to

establish

productive

linkage

programs

for

SMEs

with

global

leading

companies

that

carry

out

their

activities

in

the

priority

institutional

sectors

and/or

in

the

regional

productive

vocations.

With

this

objective,

we

seek

that

the

benefits

of

economic

activity

be

distributed

throughout

the

country

and

among

all

companies

and

that

they

do

not

remain

only

in

a

few

companies.

6.3.-

Relevance

of

Priority

Objective

3:

Promote

greater

penetration

of

credit

in

the

private

sector,

with

special

emphasis

on

SMEs.

The

financial

sector

links

savings

and

investment

with

productive

projects,

so

it

plays

a

fundamental

role

in

the

economic

growth

of

a

country,

especially

in

the

case

of

development

banking.

An

efficient

and

well-structured

financial

system

allows

resources

to

be

mobilized

better

and

increases

the

productivity

of

investment

(14)

.

Despite

the

above,

in

Mexico

the

participation

of

credit

to

the

private

sector

only

represented

36.9%

of

GDP

in

2019,

while

in

other

Latin

American

countries

such

as

Colombia

(51.4%),

Chile

(122.5%)

and

Brazil

(63.7%)

it

is

much

higher;

as

well

as

in

more

developed

countries

such

as

the

United

States

(192%)

and

Canada

(124%)

and

in

some

Asian

countries

such

as

China

(165%).

The

penetration

of

credit

in

SMEs

is

considerably

lower,

measured

by

balance

and

number

of

companies

served

by

the

financial

sector

with

respect

to

the

total.

This

is

due,

on

one

hand,

to

the

terms

offered

by

financial

institutions

for

loans.

According

to

the

National

Survey

on

Productivity

and

Competitiveness

of

Micro,

Small

and

Medium

Enterprises

(ENAPROCE)

only

32.2%

of

SMEs

would

accept

a

loan

with

the

conditions

offered

by

the

financial

institution.

The

main

reason

for

not

taking

it

is

the

cost,

companies

consider

it

is

too

expensive.

On

the

other

hand,

we

have

the

eligibility

of

companies

as

a

limitation

of

credit

in

SMEs.

According

to

ENAPROCE,

the

main

reason

why

companies

cannot

access

credit

is

the

lack

of

collateral,

guarantee,

or

guarantor,

followed

by

a

high

level

of

debt.

The

role

of

Development

Banking

in

the

penetration

of

credit

to

the

private

sector

is

vital,

as

it

contributes

with

30%

of

commercial

credit

and,

through

guarantees,

with

approximately

65%

of

the

loans

given

to

SMEs

(15)

.

To

promote

greater

penetration

of

credit

in

the

private

sector,

this

Priority

Objective

has

three

specific

strategies

and

seven

specific

actions

that

seek

for

NAFIN's

financing

programs

to

reach

more

companies

and

more

regions

of

the country

through

the

inclusion

of

new

IFBs

and

IFNBs,

whose

result

will

be

that

more

companies

will

have

the

opportunity

to

grow

and

that

these

benefits

will

translate

into

well-being

for

the

population.

6.4.-

Relevance

of

Priority

Objective

4:

Provide

training

and

technical

assistance

to

SMEs

and

non-bank

financial

institutions

with

the

purpose

of

increasing

the

penetration

of

credit

in

the

private

sector.

In

Mexico,

SMEs

generate

almost

three

quarters

(74%)

of

the

country's

sources

of

employment.

Despite

this,

their

participation

in

Total

Gross

Production

is

only

35%.

Among

the

various

problems

that

SMEs

have,

we

find

the

lack

of

training

for

their

employees

since,

according

to

ENAPROCE

2018,

in

2017

only

15%

of

SMEs

provided

training

to

their

workers.

Also,

with

regard

to

the

administration

of

SMEs,

67%

do

not

monitor

performance

indicators.

According

to

INADEM

(16)

,

in

most

SMEs

entrepreneurs

lack

managerial

skills

and

have

not

received

training

on

how

to

start

a

business,

on

how

to

identify

business

opportunities,

how

to

evaluate

market

viability,

guarantee

financing

for

the

growth

of

the

company,

among

other

limitations.

In

general,

entrepreneurs

in

Mexico

do

not

have

experience

in

business

management,

but

learn

through

trial

and

error.

Thus,

the

lack

of

knowledge

is

one

of

the

barriers,

not

only

to

growth,

but

also

to

the

survival

of

SME

companies.

The

above

is

reflected

in

the

fact

that

only

5%

of

SMEs

are

part

of

global

value

chains,

and

35%

state

that

it

is

because

they

do

not

have

information

on

how

to

do

it.

To

provide

training

and

technical

assistance

to

exporting

SMEs

and

foreign

currency

generating

companies

and

non-bank

financial

institutions

with

the

purpose

of

increasing

the

penetration

of

credit

in

the

private

sector,

the

following

strategies

will

be

implemented.

The

first

of

them

seeks

to

strengthen

the

offer

of

courses

in

the

area

of

business

management,

operational

efficiency

and

corporate

governance

to

increase

the

productivity,

retention

and

access

to

credit

of

SMEs.

The

second

focuses

on

training

programs

for

IFNBs

so

that

they

can

become

financial

intermediaries

of

NAFIN.

This

last

one

will

be

delivered

jointly

with

BANCOMEXT.

6.5.-

Alignment

of

the

Priority

Objectives

of

the

NAFIN

Institutional

Program

2020-2024

with

the

National

Program

for

Development

Financing

2020-2024

The

Institutional

Program

is

properly

aligned

with

the

guiding

principles

established

by

the

NND

related

to

" Economy

for

well-being

" ,

" Do

not

leave

anyone

behind,

do

not

leave

anyone

out

" and

" No

to

a

rich

Government

with

a

poor

people

" .

For

its

part,

the

Priority

Objectives

of

the

Institutional

Program

are

aligned

to

Priority

Objective

6

of

PRONAFIDE

" Expand

and

strengthen

the

financing

and

planning

of

development

banking

and

other

financing

vehicles

of

the

Federal

Public

Administration,

as

well

as

foster

greater

financial

inclusion

of

the

target

sectors

and

greater

participation

of

the

private

sector,

to

contribute

to

the

sustained

economic

development

of

the country

and

to

social

well-being

" .

Priority

Objectives

of

the

Institutional

Program

of

NAFIN

2020-2024

Priority

Objectives

of

the

National

Program

for

Development

Financing

2019-2024

1.-

Contribute

to

economic

development

and

promote

regional

development

through

financing

to

companies

whose

activities

are

aligned

with

the

priority

sectors

and/or

the

productive

vocations

of

each

State.

Priority

Objective

6.-

Expand

and

strengthen

the

financing

and

planning

of

development

banking

and

other

financing

vehicles

of

the

Federal

Public

Administration,

as

well

as

foster

greater

financial

inclusion

of

the

target

sectors

and

greater

participation

of

the

private

sector,

to

contribute

to

the

sustained

economic

development

of

the country

and

to

social

well-being.

2.-

Promote

the

strengthening

of

local

supply

chains

through

financial

support

to

companies,

mainly

SMEs,

so

that

they

can

insert

themselves

into

national

and

global

value

chains.

3.-

Promote

greater

penetration

of

credit

in

the

private

sector,

with

special

emphasis

on

SMEs.

4.-

Provide

training

and

technical

assistance

to

SMEs

and

non-bank

financial

institutions

with

the

purpose

of

increasing

the

penetration

of

credit

in

the

private

sector.

7.-

Priority

Strategies

and

Specific

Actions

The

strategy

adopted

by

NAFIN

for

the

period

from

2019

to

2024

is

focused

on

three

major

elements:

1)

National

industrial

development

focused

on

13

traditional

sectors

and

8

high

technology

sectors

with

great

growth

potential,

2)

Regional

development

based

on

the

productive

vocations

of

each

region,

and

3)

Boost

to

the

priority

projects

of

the

Federal

Government.

In

this

sense,

the

Institutional

Program

has

five

Priority

Objectives,

ten

priority

strategies,

and

23

specific

actions.

Priority

Objective

1.-

Contribute

to

economic

development

and

promote

regional

development

through

financing

to

companies

whose

activities

are

aligned

with

the

priority

sectors

and/or

the

productive

vocations

of

each

State.

Priority

Strategy

1.1.-

Address

Mexican

companies

based

on

a

sectoral

and

regional

vocations

model.

Specific

Actions

1.1.1.-

Incorporate

new

priority

sectors

into

NAFIN's

financing

strategy.

1.1.2.-

Carry

out

sectoral

analyses

that

allow

identifying

areas

of

opportunity

that

can

be

covered

by

NAFIN.

1.1.3.-

Verify

and,

if

necessary,

adjust

credit

programs

with

the

objective

of

promoting

access

to

credit

in

the

priority

sectors

that

by

their

characteristics

have

limited

access.

1.1.4-

Through

guarantee

programs,

foster

the

implementation

of

financial

products

focused

on

boosting

credit

in

the

priority

sectors

and

in

the

regional

vocations

by

financial

intermediaries

banking.

1.1.5.-

Finance

with

long-term

resources

the

investment

of

projects

destined

to

increase

the

productive

capacity

of

companies

that

will

translate

into

greater

productivity

and

job

generation,

seeking

the

participation

of

commercial

banking

in

these

financing

schemes.

Priority

Strategy

1.2.-

Institutional

promotion

at

the

state

and

regional

level

focused

on

the

priority

sectors

and

regional

vocations.

Specific

Actions

1.2.1.-

Outline

regional

and

national

dissemination

programs

with

the

various

IFBs

and

IFNBs

focused

on

positioning

NAFIN

products

in

the

market.

1.2.2.-

Enhance

promotion

efforts

through

NAFIN's

Advisory

Councils.

Priority

Objective

2.-

Promote

the

strengthening

of

local

supply

chains

through

del

financial support

for companies,

primarily

for SMEs,

so that they can insert

into the

national and global

value chains.

Priority Strategy 2.1

• Establish productive chain programs with lead companies that carry out their activities in the institutional priority sectors and/or in regional productive vocations.

Specific Actions 2.1.1.- Identify the local supply needs of large lead companies with operations in priority sectors, as well as the requirements requested from their local and global suppliers.

2.2.2.- Verify and, if necessary, adjust credit programs with the objective of being able to financially articulate the productive chain programs.

Priority Objective 3.- Promote greater penetration of credit in the private sector, with special emphasis on SMEs.

Priority Strategy 3.1.- Design guarantee programs in accordance with the appetite and risk profile of each Banking Financial Intermediary, and in accordance with the priority sectors and regional vocations.

Specific Action 3.1.1.- Carry out an evaluation of the BFIs based on their risk profile, target market, expansion plans, and their performance as financial intermediaries.

3.1.2.- Design guarantee programs based on the risk and market profile of the BFIs and Non-Banking Financial Intermediaries (NBFIs), in conformity with NAFIN's strategy, which promote the penetration of credit in the private sector, with special emphasis on SMEs.

3.1.3.- Through guarantee programs, encourage the implementation of financial products in accordance with the priority sectors and regional vocations by the BFIs.

3.1.4.- Finance with long-term resources the investment of projects aimed at increasing the productive capacity of companies that translate into greater productivity and job generation, seeking the participation of commercial banking in these financing schemes.

Priority Strategy 3.2.- Increase the participation of regional banks and non-banking financial institutions as financial intermediaries to increase credit in SMEs.

Specific Action 3.2.1.- Implement training and certification programs focused on the adherence of NBFIs to NAFIN's guarantee and funding programs.

3.2.2.- Through guarantee programs, encourage the implementation of financial products in accordance with the priority sectors and regional vocations and which promote the penetration of credit in the private sector, with special emphasis on SMEs.

Priority Strategy 3.3.- Promote the professionalization of Mexican companies through financial products with the purpose of entering the securities market.

Specific Action 3.3.1.- Promote the institutionalization and establishment of corporate governance in Mexican companies through financial products, with the purpose of facilitating their access to the securities market.

Priority Objective 4.- Provide training and technical assistance to SMEs and non-banking financial institutions with the purpose of increasing the penetration of credit in the private sector.

Priority Strategy 4.1.- Offer training and technical assistance for SMEs focused on business management, operational efficiency, and corporate governance to increase their productivity, permanence, and access to credit.

Specific Action 4.1.1.- Optimize resources allocated to training and technical assistance through strategic alliances with educational institutions, chambers, business associations, public bodies, and NAFIN business areas, in order to design programs in accordance with the real needs of SMEs and the business sector.

4.1.2.- Design of training programs for SMEs focused on business management, operational efficiency, and corporate governance.

4.1.3.- Establishment of specialized training programs to facilitate access to credit among SMEs.

Priority Strategy 4.2.- Design training and certification programs for non-banking financial institutions so that they can become financial intermediaries for NAFIN.

Specific Action 4.2.1.- Provide training and technical assistance to NBFIs focused on their professionalization and standardization of processes with the purpose of enabling them to become financial intermediaries for NAFIN.

4.2.2.- Implement certification programs for NBFIs that endorse them as approved intermediaries by NAFIN.

8.- Goals for Well-being and Parameters

The indicators allow identifying whether NAFIN's actions are having the expected results and impact, or if it is necessary to make adjustments to ensure compliance with the established goals.

Additionally, they will serve the citizenry to know the progress in the goals and will be a tool for evaluation and monitoring of the performance of the current Administration.

However, the behavior of the indicators does not depend solely on the actions of the Government of the Republic.

It is also affected by external factors such as the effects of international economic cycles, or depends on collaboration with other actors or levels of government for the achievement of its goal.

Therefore, the monitoring of the indicators should take these and other considerations into account.

Priority Objective #

Goals for Well-being #

Parameters

1

1.1

Growth in Financial Inclusion of the Sector

1.2

Inclusion of new borrowers

1.3

Financial inclusion by gender

2

2.1

Growth in the Balance of Direct and Induced Credit to the Private Sector

2.1

Financing of new borrowers

2.2

Financing by Gender

3

3.1

Companies promoted to credit and capital markets

3.2

Level of gradualness of borrowers with short-term financing

3.3

Companies promoted to capital markets

4

4.1

Training provided

4.1

Training provided by stratum

4.2

Training provided by Gender

Priority Objective #

Monitoring Indicators

1

1.3

Financial Inclusion of the Sector by stratum

1.4

Inclusion of new borrowers by stratum

1.5

Number of renewable energy projects supported

3

3.1

Growth in the Balance of Direct and Induced Credit to the Private Sector by stratum

3.2

Financing of new borrowers

3.3

Amount of financing granted to renewable energy projects

Well-being Goal of Priority Objective 1

WELL-BEING GOAL ELEMENTS OR PARAMETER (INCLUSION/FLOW)

Name

Growth in Financial Inclusion of the Sector

Priority Objective

Contribute to economic development and promote regional development through financing to companies whose activities are aligned with the priority sectors and/or the productive vocations of each State.

Definition or description

Measures the growth in the inclusion of the total number of companies with direct and induced financing to the private sector.

Level of disaggregation

Geographical: National

Periodicity or frequency of measurement

Annual

Type

Strategic

Accumulated or periodic

Accumulated

Unit of measurement

Percentage of Supported Companies

Data collection period

Annual

Dimension

Effectiveness: measures the degree of compliance with Priority Objectives.

Information availability

March of the following year

Expected trend

Constant growth percentage

Unit responsible for reporting progress

Direction of Planning and Financial Programming.

Calculation method

Comparative of the number of accumulated borrowers with respect to the base year.

Observations

N/A

APPLICATION OF THE CALCULATION METHOD FOR OBTAINING THE BASELINE

Variable name

1

Total number of supported companies in the year

Variable value

1

1,586,270

Information source for variable

1

Institutional databases

Variable name

2

Total number of supported companies in the immediate preceding year

Variable value

2

509,250

Information source for variable

2

Institutional databases

Substitution in calculation method

(Total number of supported companies year n / Total number of supported companies 2018) - 1.

WELL-BEING GOAL ELEMENTS OR PARAMETER (INCLUSION/FLOW)

BASELINE VALUE AND GOALS

Baseline

Note on the baseline

Value

1%

Year

2019

Goal

2024

Note on the 2024 goal

211.5%

Percentage increase of accumulated companies in the period 2018-2024

HISTORICAL SERIES OF THE WELL-BEING GOAL OR PARAMETER

2012

2013

2014

2015

2016

2017

2018

2019

NA

1%

GOALS

2020

2021

2022

2023

2024

42.3%

83.9%

126.0%

168.6%

211.5%

Parameter 1 of Priority Objective 1

WELL-BEING GOAL ELEMENTS OR PARAMETER (NEW BORROWERS)

Name

Inclusion of new borrowers

Priority Objective

Promote greater penetration of credit in the private sector, with special emphasis on SMEs.

Definition or description

Measures the number of clients attended for the first time with direct and induced financing to the private sector.

Level of disaggregation

• Geographical: National

Periodicity or frequency of measurement

March of the following year

Type

Strategic

Accumulated or periodic

Accumulated

Unit of measurement

Companies that have been attended for the first time with direct or induced credit to the private sector.

Data collection period

Annual

Dimension

Effectiveness: measures the degree of compliance with Priority Objectives.

Information availability

March of the following year

Expected trend

Constant growth of Supported Companies

Unit responsible for reporting progress

Direction of Planning and Financial Programming.

Calculation method

Comparative of companies attended for the first time with direct or induced credit to the private sector with respect to the base year.

Observations

NA

APPLICATION OF THE CALCULATION METHOD FOR OBTAINING THE BASELINE

Variable name

1

Companies attended for the first time

Variable value

1

206,000

Information source for variable

1

Variable name

2

Variable value

2

Information source for variable

2

Variable name

...

Variable value

...

Information source for variable

...

Variable name

n

Variable value

n

Information source for variable

n

Substitution in calculation method

Total number of companies attended for the first time

BASELINE VALUE AND GOALS

Baseline

Note on the baseline

Value

206,000

Year

2018

Goal

2024

Note on the 2024 goal

1,279,988

Total number of companies attended for the first time, accumulated in the period 2018-2024

HISTORICAL SERIES OF THE WELL-BEING GOAL OR PARAMETER

2012

2013

2014

2015

2016

2017

2018

206,000

GOALS

2020

2021

2022

2023

2024

NA

NA

NA

NA

NA

Parameter 2 of Priority Objective 1

WELL-BEING GOAL ELEMENTS OR PARAMETER (FIN INCL X GEN)

Name

Financial inclusion by Gender

Priority Objective

Contribute to economic development and promote regional development through financing to companies whose activities are aligned with the priority sectors and/or the productive vocations of each State.

Definition or description

Measures the number of clients attended with direct and induced credit to the private sector by Gender (Male - Female).

Level of disaggregation

Geographical: National

Periodicity or frequency of measurement

March of the following year

Type

Strategic

Accumulated or periodic

Accumulated

Unit of measurement

Number of clients attended with direct and induced credit to the private sector by Gender (Male - Female).

Data collection period

Annual

Dimension

Effectiveness: measures the degree of compliance with Priority Objectives.

Information availability

March of the following year

Expected trend

Equity in the distribution of direct and induced credit to the private sector by Gender (Male - Female).

Unit responsible for reporting progress

Direction of Planning and Financial Programming.

Calculation method

Comparative of the percentage of direct and induced credit to the private sector by Gender (Male - Female) with respect to the base year.

Observations

NA

APPLICATION OF THE CALCULATION METHOD FOR OBTAINING THE BASELINE

Variable name

1

"Women" or "Companies led by Women" attended with direct and induced credit to the private sector.

Variable value

1

NA

Information source for variable

1

Variable name

2

"Men" or "Companies led by Men" attended with direct and induced credit to the private sector.

Variable value

2

NA

Information source for variable

2

Variable name

...

Variable value

...

Information source for variable

...

Variable name

n

Variable value

n

Information source for variable

n

Substitution in calculation method

1.

Number of "Women" or "Companies led by Women" clients attended with direct and induced credit to the private sector.

2.

Number of "Men" or "Companies led by Men" clients attended with direct and induced credit to the private sector.

BASELINE VALUE AND GOALS

Baseline

Note on the baseline

Value

NA

Year

2018

Goal

2024

Note on the 2024 goal

NA

HISTORICAL SERIES OF THE WELL-BEING GOAL OR PARAMETER

2012

2013

2014

2015

2016

2017

2018

ND

GOALS

2020

2021

2022

2023

2024

NA

NA

NA

NA

NA

Well-being Goal of Priority Objective 2

WELL-BEING GOAL ELEMENTS OR PARAMETER (FINANCING)

Name

Growth in the Balance of Direct and Induced Credit to the Private Sector

Priority Objective

Promote greater penetration of credit in the private sector, with special emphasis on SMEs.

Definition or description

Measures the nominal growth in the Balance of Direct and Induced Credit to the Private Sector.

Level of disaggregation

Geographical: National

Periodicity or frequency of measurement

March of the following year

Type

Strategic

Accumulated or periodic

Accumulated

Unit of measurement

Percentage of growth of the Balance of Direct and Induced Credit (in MDP).

Data collection period

Annual

Dimension

Effectiveness: measures the degree of compliance with Priority Objectives.

Information availability

March of the following year

Expected trend

Constant growth percentage

Unit responsible for reporting progress

Direction of Planning and Financial Programming.

Calculation method

Comparative of the Balance of Direct and Induced Credit with respect to the year subject to comparison.

Observations

NA

APPLICATION OF THE CALCULATION METHOD FOR OBTAINING THE BASELINE

Variable name

1

Balance of Direct and Induced Credit of the year.

Variable value

1

472,901

Information source for variable

1

Variable name

2

Balance of Direct and Induced Credit of the immediate preceding year.

Variable value

2

451,119

Information source for variable

2

Substitution in calculation method

(Total amount of the Balance of Direct and Induced Credit to the Private Sector year n / Total amount of the Balance of Direct and Induced Credit to the Private Sector year n-1) - 1

BASELINE VALUE AND GOALS

Baseline

Note on the baseline

Value

4.8%

Year

2019

Goal

2024

Note on the 2024 goal

6.1%

Average percentage increase of direct and induced credit, accumulated in the period 2018-2024.

HISTORICAL SERIES OF THE WELL-BEING GOAL OR PARAMETER

2012

2013

2014

2015

2016

2017

2018

2019

NA

4.8%

GOALS

2020

2021

2022

2023

2024

6.5%

6.3%

6.2%

6.1%

6.1%

Parameter 1 of Priority Objective 2

WELL-BEING GOAL ELEMENTS OR PARAMETER (FINANCING NEW BORROWERS)

Name

Financing of new borrowers

Priority Objective

Contribute to economic development and promote regional development through financing to companies whose activities are aligned with the priority sectors and/or the productive vocations of each State.

Definition or description

Measures the Balance of Direct and Induced Credit to the Private Sector of clients attended for the first time.

Level of disaggregation

• Geographical: National

Periodicity or frequency of measurement

March of the following year

Type

Strategic

Accumulated or periodic

Accumulated

Unit of measurement

Balance of Direct and Induced Credit to the Private Sector of clients attended for the first time.

Data collection period

Annual

Dimension

Effectiveness: measures the degree of compliance with Priority Objectives.

Information availability

March of the following year

Expected trend

Constant growth of the Balance of Direct and Induced Credit to the Private Sector of clients attended for the first time.

Unit responsible for reporting progress

Direction of Planning and Financial Programming.

Calculation method

Comparative of the Balance of Direct and Induced Credit to the Private Sector of clients attended for the first time with respect to the base year.

Observations

NA

APPLICATION OF THE CALCULATION METHOD FOR OBTAINING THE BASELINE

Variable name

1

Balance of Direct and Induced Credit to the Private Sector of clients attended for the first time.

Variable value

1

39,706

Information source for variable

1

Variable name

2

Variable value

2

Information source for variable

2

Variable name

...

Variable value

...

Information source for variable

...

Variable name

n

Variable value

n

Information source for variable

n

Substitution in calculation method

BASELINE VALUE AND GOALS

Baseline

Note on the baseline

Value

39,706

Year

2018

Goal

2024

Note on the 2024 goal

42,148

HISTORICAL SERIES OF THE WELL-BEING GOAL OR PARAMETER

2012

2013

2014

2015

2016

2017

2018

39,706

GOALS

2020

2021

2022

2023

2024

NA

NA

NA

NA

NA

Parameter 2 of Priority Objective 2

WELL-BEING GOAL ELEMENTS OR PARAMETER (FIN. BY GENDER)

Name

Financing by Gender

Priority Objective

Contribute to economic development and promote regional development through financing to companies whose activities are aligned with the priority sectors and/or the productive vocations of each State.

Definition or description

Measures the Balance of Direct and Induced Credit to the Private Sector of clients attended by Gender (Male - Female).

Level of disaggregation

• Geographical: National

Periodicity or frequency of measurement

March of the following year

Type

Strategic

Accumulated or periodic

Accumulated

Unit of measurement

Balance of Direct and Induced Credit to the Private Sector of clients by Gender (Male - Female).

Data collection period

Annual

Dimension

Effectiveness: measures the degree of compliance with Priority Objectives.

Information availability

March of the following year

Expected trend

Equity in the distribution of the balance of direct and induced credit to the private sector by Gender (Male - Female).

Unit responsible for reporting progress

Direction of Planning and Financial Programming.

Calculation method

Comparative of the percentage of the balance of direct and induced credit to the private sector by Gender (Male - Female) with respect to the base year.

Observations

NA

APPLICATION OF THE CALCULATION METHOD FOR OBTAINING THE BASELINE

Variable name

1

Total amount of the Balance of Direct and Induced Credit to "Women" or "Companies led by Women" attended.

Variable value

1

NA

Information source for variable

1

Variable name

2

Total amount of the Balance of Direct and Induced Credit to "Men" or "Companies led by Men".

Variable value

2

NA

Information source for variable

2

Variable name

...

Variable value

...

Information source for variable

...

Variable name

n

Variable value

n

Information source for variable

n

Substitution in calculation method

1.

Total amount of the Balance of Direct and Induced Credit to the Private Sector of "Women" or "Companies led by Women" clients attended.

2.

Total amount of the Balance of Direct and Induced Credit to the Private Sector of "Men" or "Companies led by Men" clients attended.

BASELINE VALUE AND GOALS

Baseline

Note on the baseline

Value

NA

Year

2018

Goal

2024

Note on the 2024 goal

NA

HISTORICAL SERIES OF THE WELL-BEING GOAL OR PARAMETER

2012

2013

2014

2015

2016

2017

2018

NA

GOALS

2020

2021

2022

2023

2024

NA

NA

NA

NA

NA

Well-being Goal of Priority Objective 3

WELL-BEING GOAL ELEMENTS OR PARAMETER (PROMOTED COMPANIES)

Name

Companies promoted to credit and capital markets

Priority Objective

Strengthen the financial structure (investments in fixed assets, working capital, and improve the debt profile) of companies, improve their competitiveness, and achieve permanence.

Definition or description

Number of companies in the Prime Level Certification program.

Level of disaggregation

Geographical: National

Periodicity or frequency of measurement

March of the following year

Type

Strategic

Accumulated or periodic

Accumulated

Unit of measurement

Number of Companies supported to quote on the Stock Exchange.

Data collection period

Annual

Dimension

Effectiveness: measures the degree of compliance with Priority Objectives.

Information availability

March of the following year

Expected trend

Constant growth of Supported Companies.

Unit responsible for reporting progress

Direction of Planning and Financial Programming.

Calculation method

Comparative of the number of companies in the Prime Level Certification program with respect to the base year.

Observations

NA

APPLICATION OF THE CALCULATION METHOD FOR OBTAINING THE BASELINE

Variable name

1

Number of companies in the Prime Level Certification program.

Variable value

1

NA

Information source for variable

1

Variable name

2

Variable value

2

Information source for variable

2

Variable name

...

Variable value

...

Information source for variable

...

Variable name

n

Variable value

n

Information source for variable

n

Substitution in calculation method

BASELINE VALUE AND GOALS

Baseline

Note on the baseline

Value

NA

Year

2018

Goal

2024

Note on the 2024 goal

NA

HISTORICAL SERIES OF THE WELL-BEING GOAL OR PARAMETER

2012

2013

2014

2015

2016

2017

2018

NA

GOALS

2020

2021

2022

2023

2024

NA

NA

NA

NA

NA

Data Collection

Annual

Dimension

Effectiveness: measures the degree of compliance with Priority Objectives.

Information Availability

March of the following year

Expected Trend

Increase in supported companies to list on the Stock Exchange

Responsible Unit for Reporting Progress

Financial Planning and Programming Directorate.

Calculation Method

Accumulated number of companies that entered the Prime program

Observations

NA

APPLICATION OF THE CALCULATION METHOD FOR OBTAINING THE BASELINE

Variable Name

1

Number of Companies

Base Year

Variable Value

1

N/A

Information Source for Variable 1

Variable Name

2

Variable Value

2

Information Source for Variable 2

Variable Name

...

Variable Value

...

Information Source for Variable ...

Variable Name

n

Variable Value

n

Information Source for Variable n

Substitution in Calculation Method

Count of the Number of companies that have been promoted to participate in the Securities Market

BASELINE VALUE AND TARGETS

Baseline

Note on the baseline

Value

1

Year

2018

Target

2024

Note on the 2024 target

1

HISTORICAL SERIES OF THE TARGET FOR WELL-BEING OR PARAMETER

2012

2013

2014

2015

2016

2017

2018

N/A

TARGETS

2020

2021

2022

2023

2024

1

1

2

2

2

Parameter 1 of Priority Objective 3

TARGET ELEMENTS FOR WELL-BEING OR PARAMETER (GRADUALITY LEVEL)

Name

Level of gradualness of accredited entities with short-term financing

Priority Objective

Promote the strengthening of local supply chains through financial support to companies, primarily SMEs, so that they can insert themselves into national value chains.

Definition or Description

Measures the number of accredited entities with short-term financing with 10 years or more of seniority.

Level of Disaggregation

Geographical: National

Periodicity or Frequency of Measurement

March of the following year

Type

Strategic

Accumulated or Periodic

Accumulated

Unit of Measurement

Number of accredited entities with short-term financing with 10 or more years of seniority

Data Collection Period

Annual

Dimension

Effectiveness: measures the degree of compliance with Priority Objectives.

Information Availability

March of the following year

Expected Trend

Seasonality of accredited entities

Responsible Unit for Reporting Progress

Financial Planning and Programming Directorate.

Calculation Method

Comparative of the number of accredited entities with short-term financing with 10 or more years of seniority with respect to the base year.

Observations

NA

APPLICATION OF THE CALCULATION METHOD FOR OBTAINING THE BASELINE

Variable Name

1

Number of accredited entities with short-term financing

Variable Value

1

6,383

Information Source for Variable 1

Variable Name

2

Variable Value

2

Information Source for Variable 2

Variable Name

...

Variable Value

...

Information Source for Variable ...

Variable Name

n

Variable Value

n

Information Source for Variable n

Substitution in Calculation Method

Count of the number of accredited entities with short-term financing that have 10 years or more of seniority.

BASELINE VALUE AND TARGETS

Baseline

Note on the baseline

Value

6,383

Year

2018

Target

2024

Note on the 2024 target

5,406

HISTORICAL SERIES OF THE TARGET FOR WELL-BEING OR PARAMETER

2012

2013

2014

2015

2016

2017

2018

2019

6,383

NA.

TARGETS

2020

2021

2022

2023

2024

NA

NA

NA

NA

NA

Parameter 2 of Priority Objective 3

TARGET ELEMENTS FOR WELL-BEING OR PARAMETER

Name

Companies promoted to capital markets

Priority Objective

Promote companies to meet stock market requirements for debt issuance and/or initial placement of securities, through compliance with corporate governance standards.

Definition or Description

Measures the number of companies supported to achieve Prime Certification.

Level of Disaggregation

-

Geographical: National

Periodicity or Frequency of Measurement

March of the following year

Type

Strategic

Accumulated or Periodic

Accumulated

Unit of Measurement

Number of Companies supported for Prime Certification

Data Collection Period

Annual

Dimension

Effectiveness: measures the degree of compliance with Priority Objectives.

Information Availability

March of the following year

Expected Trend

Constant growth

Responsible Unit for Reporting Progress

Financial Planning and Programming Directorate.

Calculation Method

Comparative of the number of companies supported to achieve Prime Certification with respect to the base year.

Observations

N/A

APPLICATION OF THE CALCULATION METHOD FOR OBTAINING THE BASELINE

The baseline must correspond to a definitive value for the 2018 cycle or prior, it cannot be a preliminary or estimated value.

Variable Name

1

Companies supported for Prime Certification

Variable Value

1

1,165

Information Source for Variable 1

Variable Name

2

Variable Value

2

Information Source for Variable 2

Variable Name

...

Variable Value

...

Information Source for Variable ...

Variable Name

n

Variable Value

n

Information Source for Variable n

Substitution in Calculation Method

.

BASELINE VALUE AND TARGETS

Baseline

Note on the baseline

Value

Year

2018

Target

2024

Note on the 2024 target

HISTORICAL SERIES OF THE TARGET FOR WELL-BEING OR PARAMETER

Values should be recorded according to the measurement frequency of the Well-being Target or Parameter.

You can record NA (Not Applicable) and ND (Not Available) when appropriate.

2012

2013

2014

2015

2016

2017

2018

1,165

TARGETS

Only applies to Well-being Targets.

You can record NA when a target does not apply for that year, according to the measurement frequency.

2020

2021

2022

2023

2024

2,437

3,714

5,028

6,383

7,777

Well-being Target of Priority Objective 4

TARGET ELEMENTS FOR WELL-BEING OR PARAMETER (TRAINING)

Name

Training Provided

Priority Objective

Provide training and technical assistance to SMEs and non-bank financial institutions with the aim of increasing credit penetration in the private sector.

Definition or Description

Measures the number of training courses conducted for the total number of companies.

Level of Disaggregation

Geographical: National

Periodicity or Frequency of Measurement

March of the following year

Type

Strategic

Accumulated or Periodic

Accumulated

Unit of Measurement

Number of Training Courses conducted for the total number of companies

Data Collection Period

Annual

Dimension

Effectiveness: measures the degree of compliance with Priority Objectives.

Information Availability

March of the following year

Expected Trend

Increase in Training Courses conducted for the total number of companies

Responsible Unit for Reporting Progress

Financial Planning and Programming Directorate.

Calculation Method

Total number of Training Courses conducted for companies with respect to the base year.

Observations

NA

APPLICATION OF THE CALCULATION METHOD FOR OBTAINING THE BASELINE

Variable Name

1

Number of training courses provided to the total number of companies

Variable Value

1

55,585

Information Source for Variable 1

Substitution in Calculation Method

Count of the number of training courses provided to the total number of companies.

BASELINE VALUE AND TARGETS

Baseline

Note on the baseline

Value

55,585

Year

2018

Target

2024

Note on the 2024 target

93,300

Total accumulated courses in the period 2018 to 2024

HISTORICAL SERIES OF THE TARGET FOR WELL-BEING OR PARAMETER

2012

2013

2014

2015

2016

2017

2018

2019

55,585

72,100

TARGETS

2020

2021

2022

2023

2024

76,220

80,400

84,640

88,940

93,300

Parameter 1 of Priority Objective 4

TARGET ELEMENTS FOR WELL-BEING OR PARAMETER (TRAINING)

Name

Training Provided by Stratum

Priority Objective

Provide training and technical assistance to SMEs and non-bank financial institutions with the aim of increasing credit penetration in the private sector.

Definition or Description

Measures the number of training courses conducted for the total number of companies by stratum.

Level of Disaggregation

-

Micro, small, medium, and large companies supported with Training

Periodicity or Frequency of Measurement

March of the following year

Type

Strategic

Accumulated or Periodic

Accumulated

Unit of Measurement

Number of Training Courses conducted for the total number of companies by stratum

Data Collection Period

Annual

Dimension

Effectiveness: measures the degree of compliance with Priority Objectives.

Information Availability

March of the following year

Expected Trend

Increase in Training Courses conducted for the total number of companies by stratum

Responsible Unit for Reporting Progress

Financial Planning and Programming Directorate.

Calculation Method

Comparative of the number of Training Courses conducted for the total number of companies with respect to the base year by stratum.

Observations

NA

APPLICATION OF THE CALCULATION METHOD FOR OBTAINING THE BASELINE

Variable Name

1

In-person Courses

Variable Value

1

0

Information Source for Variable 1

Variable Name

2

Online Courses

Variable Value

2

55,585

Information Source for Variable 2

Substitution in Calculation Method

Number of training courses provided to the total number of companies by stratum.

BASELINE VALUE AND TARGETS

Baseline

Note on the baseline

Value

In-person: 0

Online: 55,585

Year

2018

Target

2024

Note on the 2024 target

NA

HISTORICAL SERIES OF THE TARGET FOR WELL-BEING OR PARAMETER

2012

2013

2014

2015

2016

2017

2018

2019

In-person: 0

Online: 55,585

NA

TARGETS

2020

2021

2022

2023

2024

NA

NA

NA

NA

NA

Parameter 2 of Priority Objective 4

TARGET ELEMENTS FOR WELL-BEING OR PARAMETER (TRAINING. X GENDER)

Name

Training Provided by Gender

Priority Objective

Provide training and technical assistance to SMEs and non-bank financial institutions with the aim of increasing credit penetration in the private sector.

Definition or Description

Measures the number of Women and Men who received training courses (Gender).

Level of Disaggregation

-

Geographical: National

Periodicity or Frequency of Measurement

March of the following year

Type

Strategic

Accumulated or Periodic

Accumulated

Unit of Measurement

Number of Women and Men who received training courses

Data Collection Period

Annual

Dimension

Effectiveness: measures the degree of compliance with Priority Objectives.

Information Availability

March of the following year

Expected Trend

Equity in the distribution of the Number of Women and Men who received training courses

Responsible Unit for Reporting Progress

Financial Planning and Programming Directorate.

Calculation Method

Number of Women and Men who received training courses with respect to the base year.

Observations

NA

APPLICATION OF THE CALCULATION METHOD FOR OBTAINING THE BASELINE

Variable Name

1

Women who received training courses

Variable Value

1

26,799

Information Source for Variable 1

Variable Name

2

Men who received training courses

Variable Value

2

27,681

Information Source for Variable 2

Substitution in Calculation Method

1. Count of the number of Women who received training courses

2. Count of the number of Men who received training courses

BASELINE VALUE AND TARGETS

Baseline

Note on the baseline

Value

Women: 26,799

Men: 27,681

Year

2018

Target

2024

Note on the 2024 target

NA

HISTORICAL SERIES OF THE TARGET FOR WELL-BEING OR PARAMETER

2012

2013

2014

2015

2016

2017

2018

2019

Women: 26,799

Men: 27,681

NA.

TARGETS

2020

2021

2022

2023

2024

NA

NA

NA

NA

NA

9.- Epilogue: Vision for the Future

The history of the last forty years of development banking is linked to the structural changes of the Mexican economy.

This change was accompanied by new public policies and, at some point, by the lack of industrial policy promoted by the State.

In the case of NAFIN, at the end of the eighties, it underwent a structural change in its mandate and activity, going from being a bank supporting state-owned companies to being a bank supporting the private sector with a special emphasis on SMEs.

In recent years, the challenges, which have not been minor, have led NAFIN to break paradigms in order to continue fulfilling its mandate.

In the coming years, in addition to being one of the main instruments of the federal government for the implementation of economic, industrial, and development policy, it is expected that NAFIN will contribute to strengthening the internal market and to the creation of more and better jobs that help promote the well-being of the population throughout the country.

In the long-term vision, NAFIN will not only promote the productivity of SMEs in an inclusive manner throughout the country, but will also promote the well-being of the population through support for the government's strategic projects.

For example, through support for the Maya Train, it will promote tourism, job creation, and sustainable development in the Southeast region.

In the face of the transformation we are living through, the federal government will build a new path to development for well-being, a path in which a more active role of development banking in the government's economic development policies is required, without these supports meaning a surrender of its mandate and, above all, its financial soundness.

For this reason, NAFIN will work to boost economic reactivation and achieve that the economy returns to grow at acceptable rates, but without these efforts being oriented to irrationally and uncritically multiply production, distribution, and consumption, and much less to concentrate wealth in a few hands, but rather to the well-being of the population.

Thus, by 2024, NAFIN's programs and the strategy described here will be a pillar for building modernity from the bottom up, by everyone and without excluding anyone.

Just as to achieve the objective of creating enough jobs to absorb the demand of young people, non-precarious, formal jobs with dignified conditions that keep them away from crime and violence, that offer them opportunities, and that do not force them to migrate to obtain well-being.

The future looks complicated, as it looked at the end of the eighties with the structural change, in the mid-nineties with the bankruptcy of the banking sector, or during the 2008 crisis.

However, the talent and capacity of the men and women who have worked for this bank have made NAFIN's growth possible.

Therefore, we must follow the maxim that "the future must be an improved present" so that our capabilities today make better institutions with better people.

Mexico City, on December 15, 2020. - The General Director of Nacional Financiera, National Credit Society, Development Banking Institution, Carlos Noriega Romero. - Signature.

1 ENAPROCE 2018, INEGI, https://www.inegi.org.mx/contenidos/programas/enaproce/2018/doc/ ENAPROCE2018Pres.pdf

2 OECD: Updating the productivity of traditional small businesses: the role of skills and management practices.

3 Global Forum of Productivity, OECD, 2017,

http://www.oecd.org/global-forum-productivity/country-profiles/mexico.htm

4 A tale of two Mexicos: Growth and prosperity in a two speed country; E. Bolio, J. Reemes, et al. McKinsey Group,

2014, https://www.mckinsey.com/featured-insights/americas/a-tale-of-two-mexicos

5 Inadem Diagnosis of the National Entrepreneurship Fund

6 Inegi: Business life expectancy (2015).

7 Essays, UK. (2013). Role Of Banks Financial Institutions In Economic Growth Economics Essay. Taken from

https://www.ukessays.com/essays/economics/role-of-banks-financial-institutions-in-economic-growth-economics-essay.php? vref=1

8 https://www.20minutos.com.mx/noticia/496972/0/obtienen-primer-credito-en-sofomes-60-por-ciento-de-empresas- mexicanas/

9 Analysis carried out by NAFIN with information from the CNBV.

10 The Footwear sector does not meet all the established requirements, but is considered a priority due to its impact on job generation.

11 Global Forum of Productivity, OECD, 2017,

http://www.oecd.org/global-forum-productivity/country-profiles/mexico.htm

12 A tale of two Mexicos: Growth and prosperity in a two speed country; E. Bolio, J. Reemes, et al. McKinsey Group,

2014, https://www.mckinsey.com/featured-insights/americas/a-tale-of-two-mexicos

13 OECD: Updating the productivity of traditional small businesses: the role of skills and management practices.

14 Essays, UK. (2013). Role Of Banks Financial Institutions In Economic Growth Economics Essay. Taken from

https://www.ukessays.com/essays/economics/role-of-banks-financial-institutions-in-economic-growth-economics-essay.php? vref=1

15 Analysis carried out by Bancomext and NAFIN with information from the CNBV.

16 Working Document: Updating the productivity of traditional small businesses: the role of skills and management practices for the International Conference The Development of Public Policies for the modernization of productivity in traditional small businesses, Puerto Vallarta Mexico, November 2016.

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