BRING IT TO THE BANK

Mexico 2018 | FINANCE | INTERVIEW

TBY talks to Francisco González Díaz, Director General of Bancomext, on opening new avenues for growth, looking beyond the Americas, and supporting SMEs.

Francisco González Díaz
BIOGRAPHY
Francisco González Díaz is the former CEO of ProMéxico. González holds a degree in business administration from the Instituto Tecnológico Autónomo de México. He earned a master’s degree in administration from the Instituto Tecnológico y de Estudios Superiores de Monterrey and another in business administration from the University of Texas. His professional experience spans more than 20 years, and he has been committed to the growth of the country. Among his activities in the private initiative, he was chairman of a company in the biotechnology and nutrition sector as well as the banking and finance sector.

What opportunities do you see for Mexico to diversify its exports and trade partners?

These are interesting times. As a country and as Bancomext, we have been opening new avenues, for example to South America. We are opening more lines with different banks for factoring, specific programs, and specific credits. In this sense, Central America also plays a special role. There are more Mexican companies exporting to Central America than to South America. Our trade relationship with Central America is also larger than with Spain. Mexico has a specific free trade agreement with Central America. We have many opportunities to boost our business with Central and South America. Bancomext has been in talks with the largest international banks in Mexico and South America and they are keen to start working with us as their export credit agency. This means they have the guarantee of Bancomext and can thus lend to their customers in their home countries at a better interest rate.

How can Mexico strengthen its trade ties beyond the Americas?

There are opportunities for us in the Trans-Pacific Partnership (TPP-11). We also have excellent opportunities in China and Korea, and not just in manufacturing. We are rapidly creating a creative industry in Mexico that is interesting for the Chinese, Japanese, and Korean markets, for example. Mexico also wants to continue to work with our European friends. Mexico has been the largest investor in Spain after the EU for the last three years. We are also interested in Italy and Russia, where we can sell a number of products. The idea is to focus on specific niches where we have a great number of potential customers in Russia. We predict great markets in that area. We are financing Mexican exporters of halal products now as well. Qatar has already purchased our halal beef and we intend to continue to explore the opportunities for halal exports from Mexico. There have been a number of trade delegations to the Middle East to develop this market. This halal market also exists in London and the US. In terms of the steps, the most obvious and easiest one is for Mexico to increase trade with Central and South America, while the next obvious market is Asia because it is large. Then there is the traditional market of Europe. However, we have to look at new markets as well, such as halal and the Arab and African markets. I anticipate many Mexicans investing in Africa over the next few years

What are the biggest obstacles for Mexican SMEs to internationalize?

The first one is talent because an SME might just be one person. Part of the challenge is to develop the team of both blue- and white-collar workers an SME requires to fulfill specific roles and grow. The second challenge is financing; in the last few years interest rates were too high in Mexico, the banking system was too tight, and it was complicated to obtain credit from financial institutions. Today, it is easier, and Bancomext guarantees the credit so that banks can give loans with the risk minimized to 10% of the transaction. Interest rates are also lower now, so companies are more able to export and establish new companies overseas. Bancomext also has a great factoring system to ease the way for companies selling small quantities of products to overseas markets. The third challenge for Mexican SMEs looking to internationalize their businesses is infrastructure. It is almost impossible to send products from here to Africa, while our connectivity to Bolivia and Paraguay is poor and expensive. The same is true for exporting to Australia and New Zealand. However, Mexico has the best bridge to places such as Singapore and Shanghai from the Americas.