IFC Invests in Nexxus Fund to Promote SME Growth in Mexico

The International Finance Corporation (IFC), a member of the World Bank Group, has announced a US$30 million anchor investment in Nexxus Private Debt Fund II to support the expansion of access to finance for small and medium enterprises (SMEs) in Mexico.

The Fund's total target size is MXN4 billion (approximately US$200 million equivalent). IFC will act as an anchor investor with an equity investment of up to US$30 million equivalent in Mexican pesos or up to 20 percent of the total investment commitments in the Fund.

The investment will help address the financing gap faced by SMEs and promote economic growth, particularly in the context of nearshoring opportunities. Mexico's economy is expected to benefit significantly from nearshoring, with estimates suggesting that it could generate between 2 and 4 million jobs by 2030 and contribute to increased labor productivity and GDP growth. However, SMEs in Mexico face challenges in accessing long-term and affordable capital, hindering their ability to take advantage of nearshoring opportunities.

Micro and SMEs account for 99 percent of total firms in Mexico and are responsible for around 70 percent of the country's total employment. However, these SMEs struggle to access finance, with credit penetration rates significantly lower than the regional average. Women-owned SMEs face additional financial constraints, exacerbating gender gaps in access to finance.

"The investment in Nexxus aligns with IFC's commitment to supporting SMEs and promoting sustainable economic growth," said Juan Gonzalo Flores, IFC´s Country Manager for México. "By expanding access to finance for SMEs, particularly in the context of nearshoring, we aim to stimulate economic activity, create jobs, and foster inclusive and sustainable development in Mexico."

“We are very glad to continue our debt operations to sustain the growth of SMEs in Mexico and honored to have IFC as a repeating investor with Nexxus in different funds for more than 26 years”, said Arturo Saval, Nexxus Capital Chairman.

IFC began its relationship with Nexxus as an early limited partner investor in one of its private equity funds in 1999.

“It is always an honor to have the IFC as an investor, looking forward to deliver superior returns to the IFC and all our investors in the new debt fund”, said Roberto Langenauer, Nexxus CEO.

IFC will also provide expertise in environmental and social standards, risk management, and credit analysis practices. The investment in Nexxus is expected to have a significant impact on increasing access to finance for SMEs and support the development of the private debt funds market in the country.