La Jornada: Against Trump, Mexico has done well what it could: Asofom

Cancún, QR., Faced with the trade policy of the United States and the vagaries of President Donald Trump, the Mexican government has acted in the best possible way given the circumstances, said Javier Garza Hoeffer, president of the Association of Multiple Purpose Financial Companies (Asofom), in an interview.

The negotiation, he highlighted, involves businessmen from both countries and responds to a relationship of mutual dependence. The United States has 300 million inhabitants and Mexico has 130 million capable people, with initiative and the ability to solve problems, which makes Mexico a natural market for that country, as well as a supplier of inputs and services.

The US government, Garza Hoeffer pointed out, faces a complex reality derived from its dependence for the manufacturing of numerous products, including electronics, since a good part of the assembly is carried out in Mexican territory, which promotes the participation of small companies that are not listed as direct suppliers. These types of businesses, he said, are the field of action of Sofom.

Also in an interview, Jorge Avante, general director of Asofom, added that the annual review of the trade agreement with the United States and Canada is a key point for the sector, which maintains benefits compared to other countries, and is confident that the relationship will continue to advance despite the uncertainty that arose at the time.

Garza Hoeffer indicated that commercial uncertainty also left its mark on the growth rate of Sofom, which was lower than expected because the institutions chose to maintain greater liquidity. He explained that large companies extended their payment terms due to their own liquidity needs, which led small businesses to seek credit so as not to stop their operations.

This year Asofom celebrates two decades of existence. Its president recalled that in that period the sector has gone from operating with lax regulation to facing growing demands in terms of governance, compliance and prudential measures, in addition to the recent incorporation of artificial intelligence to streamline processes such as the review of articles of incorporation.

Avante, for his part, pointed out that artificial intelligence is also used to identify attempts at identity cloning, a risk that he considered increasingly difficult to detect. He commented that the association developed a communication program among its associates to share information about clients and protect themselves quickly against fraud attempts.

The Sofoms, said Garza Hoeffer, were consolidated as an access route to credit for businesses not served by traditional banks, mainly due to lack of history. She specified that 60 percent of small and medium-sized businesses receive their first credit through this sector, which also finances microbusinesses, workshops and ventures led by women, segments that, she said, are not specifically contemplated in Plan Mexico.

The support of development banks, he noted, has been relevant for the growth of the sector. Trusts Established in Relation to Agriculture, Nacional Financiera and the National Foreign Trade Bank have collaboration schemes with the Sofom, which fulfill the function of credit distributors in regions where there is little or no banking presence, and even in towns where there is only one ATM.

Among the main challenges of the sector, the president of Asofom identified funding, compliance with standards, governance, credit quality and the incorporation of technology. With 255 members and 14 work committees, he said, the association has scheduled a visit to New York to present the operation of Sofom to the international market.

Garza Hoeffer stated that the relationship with digital financial companies (fintech) is complementary and not directly competitive, since Sofom complements banking and fintechin turn, complement the Sofom, to the extent that they all operate based on technology.