Machinery and equipment leasing in Mexico

Small and medium-sized businesses (SME) make a significant contribution to job creation and economic growth. To do so, they need suitable finance solutions for their investments. In emerging markets, such as Mexico, domestic banks, however, often do not provide a comprehensive range of products and services for this customer group. In order to sustainably improve the financing offer for local SMEs, DEG has established a long-term partnership with two innovative leasing companies at the end of 2017.

The Mexican family business “Operadora de Servicios MEGA” offers SMEs customised solutions in the machinery and equipment leasing sector. As a strategic partner, DEG acquired a 23.5% stake in MEGA in 2017 and has become a member on the Board of Directors in order to actively support further growth in the SME segment. Moreover DEG, via its Business Support Services, supports the company in developing and implementing an environmental and social management system and in strengthening its corporate governance.

Long-term DEG loan for expanding the SME business

The company “ABC Leasing” has been arranging leasing of vehicles to SMEs in Mexico for many years. In addition, it is well-established as a specialist for machinery and equipment leasing for SMEs across the country. ABC Leasing plans to further expand its SME business. DEG is the first international development finance institution that provides the growing company with a local currency loan equivalent to EUR 10m with a fixed interest rate. The customer can request disbursement in several, even very small tranches, in line with its business model. DEG also supports ABC Leasing in developing an environmental and social management system.

DEG extends long-term financing to financial institutions and funds, in addition to direct financing for companies. These financings aim to provide small and medium-sized enterprises in developing country with long-term investment capital. In addition DEG helps to improve the environmental and social management of the financial intermediaries. This has a positive impact on the companies co-financed by them, such as improved health protection and workplace safety.