Despite living in an environment of inflation, more than half of Mexicans aspire to start a business in the next two years. Mexico is the second country with the most entrepreneurial aspirations after Colombia, according to a survey conducted by Ipsos. But the government is not doing enough to harness domestic talent, and interest rates are a key barrier.
55% of Mexicans intend to start their own business, according to a survey conducted by Ipsos, a consulting firm specializing in market research.
The bad news for Mexicans is in the business climate that prevails in the country. Only between May 2019 and July of last year, 1.6 million micro, small and medium-sized companies closed before they were two years old, according to figures from the National Institute of Statistics and Geography (Inegi). Although it should be noted that this occurred in a negative environment, due to the covid-19 pandemic.
But inflation, lack of governance and other factors affecting the Mexican economy have cast a shadow over the business climate in the country, according to the latest Bank of Mexico survey. Well, 49% of the experts consulted consider that the climate will worsen in the coming months. This proportion is higher than that observed in April, when only 24% expected a worse business climate.
Still, entrepreneurship in Mexico is higher than the world average, with just three in 10 citizens saying they are likely to start a new business in the next two years, according to Ipsos. And these are the barriers that stop them.
Government and high interest rates stop them
But Mexicans are also aware that, in order to open a business, a series of barriers must first be overcome. And, according to the Ipsos survey, these are the ones that are most on the minds of aspiring entrepreneurs: lack of financing, interest rates, lack of knowledge, among others.
Mexico the second country with the most business aspirations, among the 28 that made up the survey carried out in 2022, to find out how the inflation environment affects the different aspects of economic life.
But government is also largely to blame, “when asked how much inflation, interest rates and government support contribute to the success of new business ventures, government support ranks first overall (56%), rates interest rates second (50%) and inflation third (40%), but only about a third (30%) of all respondents say the government is doing a good job of encouraging entrepreneurship in its countries”,
“In Mexico, according to the responses of the respondents, interest rates (51%) are considered the main factor in determining the success of a new business (when applying for a loan), followed by government support (48%) and after inflation (36%), details Ipsos.
This is not far from reality, since essential items for the operation of micro-enterprises depend on financing.
According to Inegi, of 100% of the financing received by micro-enterprises in 2021, to face the pandemic, 66.7% was allocated to the acquisition of supplies and 18.5% to the payment of rent. In addition, 19.7% went to pay debts and suppliers”, indicates the report Entrepreneurship in times of inflation, by Ipsos.
In fact, according to the Ipsos survey, Mexico is the third country where access to credit is a key barrier to starting a business, only after Colombia and South Africa.
