In an interview with Expansion, Alan Elizondo Floresgeneral director of this development bank, commented that since April of last year they knew that the FND was going to disappear at any time in 2023, which gave them the opportunity to meet the producers and financial intermediaries that would be affected in order to anticipate the needs loans and prevent agricultural cycles in Sinaloa and Chihuahua, and later in Chiapas, Oaxaca and Campeche.
At the end of 2022, FIRA channeled 240,000 million pesos to the Mexican countryside, and rules out that the resources are a limitation to serve the FND borrowers: “FIRA can go up from 240,000 million to 270,000 million pesos. You have the possibility. The issue is how to structure it,” said the manager.
In his justification, President Andrés Manuel López Obrador says that Finrural’s disappearance is due to the fact that its delinquency closed at 26% last year, in addition to the fact that it provided financing without guarantees.
When asked about how FIRA will avoid triggering its default portfolio, Elizondo Flores explains that the model with which they operate allowed them to close 2022 with a delinquency of only 1.5%, and that it consists of both the intermediary, that is, the one that It is in charge of delivering the resources to the producers, as they maintain constant monitoring of the agribusiness. which allows them to activate early warnings.
“It is not convenient for the financial intermediary that this loan stops paying because they lose resources, and neither is it convenient for FIRA because in these projects the risk of the credits is shared. We have specialized people who review the projects (…) so we have the ability to anticipate problems”, he stated.
The general director of FIRA highlighted that at the end of April the first placement of a resilient bond was made in the stock market for 2,985 million pesos, the first of its kind in Latin America because the resources will seek to support projects that mitigate, and no longer prevent the impacts of climate change.
For the following months, they have the objective of making the transition orderly with FND and boosting funding support for producers.
“A third objective is to meet the needs of the national industry with access to markets and the strength of capital to get these resources. We also want to issue a thematic bond in October that is for financial inclusion and install a marketplace for new field technologies, where our 400,000 customers can connect,” said the manager.
What is FIRA?
– It is a second-tier development bank, that is, it is a wholesaler and operates with intermediaries.
– Supports the agri-food sector and rural areas, as well as small communities.
– It is made up of four trusts: FONDO, FEFA, FEGA and FOPESCA
– It has 88 offices in the country and offers four services: financing, guarantees, technical assistance and programs
– In 2022, it achieved 240,000 million pesos in financing balance, with agriculture being the most benefited with 55% of the amounts, followed by livestock (23%), rural areas (17%) and fishing (5%).
Source: FIRA and Chamber of Deputies.
