Expanding Rural Finance Project – Mexico

Topic :

The Expanding Rural Finance Project (P153338) was approved by the World Bank (WB) Board on November 24, 2015 with the development objective of expanding the availability of finance to the rural economy. The Project is supporting the borrower and implementing agency, Financiera Nacional de Desarrollo Agropecuario, Rural, Forestal y Pesquero (FND), to: (i) expand credit for rural micro, small, and medium enterprises (MSMEs); and (ii) strengthen the institutional capacity of the implementing entity and the participating financial intermediaries (PFIs). The Project became effective on July 13, 2016, and its current closing date is December 31, 2020.

The Project has also made satisfactory progress towards achieving the PDO which is also critical development objective for Mexico, in supporting inclusion, jobs and poverty reduction in the poorer states in the South. The Project has been effective and efficient in achieving its objectives, and it is central to new government’s goal of reducing regional inequalities and supporting the income of rural people in the poorer states of the south (and center) of the country. Lack of access to finance has been a bottleneck for growth and poverty reduction across the country, but particularly affects marginalized and rural areas of lower income states (predominantly in the south of the country), and specific population groups like women—all directly targeted by this Project. The Project is performing well against both the PDO and intermediate target indicators. The reach to the targeted MSMEs in rural areas in poorer states and women entrepreneurs is performing beyond expectations. The institutional capacity building to FND, including as regards to the framework for lending to rural MSMEs, and to the participating financial intermediaries (PFIs) has also been successful. These efforts would need to continue, as they would enable sustainability in rural finance.

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