COVID-19 Financial Access DPF

closed

The development objective of COVID-19 Financial Access Development Policy Financing Program aims to: (i) support liquidity in the financial sector; and (ii) establish instruments for improved financial access. Insufficient financial inclusion and lack of access to credit are some of the factors contributing to low growth and limited poverty reduction in Mexico, as highlighted by the Systematic Country Diagnostic (SCD) and the government’s own assessment. In the context of the economic and social fallout of the Coronavirus (COVID-19) pandemic, the program supported by this operation is as critical today and it was before, but even more urgent. The role of access to finance and a fluid intermediation of resources have become even more pressing in the context of the Coronavirus (COVID-19) crisis, mitigating the impact on the real economy and households. Providing short time and sustained credit to firms and making social transfers to poor households or workers require efficient financial services networks including remote digital payment systems. Measures to enable digital technology solutions, bridge access gaps among groups of the population and Micro, Small and Medium Enterprises (MSMEs), and ease financial intermediation, are central to this operation. Under Coronavirus (COVID-19), the Mexican financial system faces important challenges for the banking system to channel resources in the most efficient way possible. Authorities are responding to a fastmoving and extraordinary situation creating liquidity buffers. In this context, this operation’s first pillar supports measures to enable banks’ access to liquidity facilities and the reduction of the monetary regulation deposit requirements to free up resources for banks to increase their liquidity. The second pillar enables instruments for improved financial access.