EMPOWERING SMALL AND MEDIUM-SIZED ENTERPRISES (SMEs) BY LEVERAGING PUBLIC PROCUREMENT

The report examines Mexico's efforts to integrate SMEs into the public procurement process to combat economic dualism and low productivity. It details eight 'Big Ideas', including the use of free trade agreement reserves, the CompraNet 5.0 e-procurement platform, and NAFIN's credit guarantee and reverse factoring programs. The document highlights that while SMEs make up 99.8% of Mexican businesses, their participation in public tenders is less than 15%, significantly lower than in other industrialized nations. It argues that leveraging public spending, particularly through state-owned enterprises like PEMEX, can catalyze SME development and overall national productivity.

• Mexico exhibits a significant productivity gap between large firms and SMEs, contributing to an 'economic dualism' where SMEs represent 99.8% of the 4.15 million businesses but generate only 54% of the GDP.
• SME participation in Mexican public procurement is notably low at less than 15%, trailing behind other countries such as Brazil (30%), Italy (50%), and Ireland (65%).
• Mexico has underutilized legal set-aside reserves in its free trade agreements that allow for national prioritization of SMEs; between 2007 and 2012, these reserves were used at only 52% on average.
• The CompraNet 5.0 platform and the Public Procurement Fair, established in 2009, aim to reduce the regulatory burden and increase transparency for SMEs entering the bidding process.
• NAFIN's National Credit Guarantee System and its auctioning mechanism for guarantees have worked to lower interest rates and reduce collateral requirements for SME loans.
• The Cadenas Productivas (Productive Chains) reverse factoring platform has provided over US$9 billion in financing, with 98% of transactions involving SMEs, by allowing them to use accounts receivable as working capital.
• The National Entrepreneur Fund provides grants covering 30% to 60% of costs for training, certification, and innovation, but its US$690 million size is considered insufficient for the needs of Mexican SMEs.
• PEMEX, which accounts for 45.6% of federal procurement, has set a goal to increase purchases from domestic suppliers by 25% over 10 years through a new corporate procurement department (DCPA) and regional projects in Tabasco.
• SMEs face critical barriers to government contracting, including a lack of commercial history for bank loans, high transaction costs for lenders, and the burden of providing working capital since governments do not pay in advance.

APA

Silva, M., & Scott, G. (2014). EMPOWERING SMALL AND MEDIUM-SIZED ENTERPRISES (SMEs) BY LEVERAGING PUBLIC PROCUREMENT. International Institute for Sustainable Development. https://www.iisd.org/system/files/publications/empowering-smes-eight-big-ideas-mexico.pdf

Chicago

Silva, Mariana, and George Scott. EMPOWERING SMALL AND MEDIUM-SIZED ENTERPRISES (SMEs) BY LEVERAGING PUBLIC PROCUREMENT. International Institute for Sustainable Development, 2014. https://www.iisd.org/system/files/publications/empowering-smes-eight-big-ideas-mexico.pdf.

Wikipedia

{{cite report |last1=Silva |first1=Mariana |last2=Scott |first2=George |title=EMPOWERING SMALL AND MEDIUM-SIZED ENTERPRISES (SMEs) BY LEVERAGING PUBLIC PROCUREMENT |publisher=International Institute for Sustainable Development |date=September 2014 |url=https://www.iisd.org/system/files/publications/empowering-smes-eight-big-ideas-mexico.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{silva2014empowering, author = {Silva, Mariana and Scott, George}, title = {{EMPOWERING SMALL AND MEDIUM-SIZED ENTERPRISES (SMEs) BY LEVERAGING PUBLIC PROCUREMENT}}, institution = {International Institute for Sustainable Development}, year = {2014}, month = sep, url = {https://www.iisd.org/system/files/publications/empowering-smes-eight-big-ideas-mexico.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }