MEXICO: National Institute of the Entrepreneur (INADEM) is at risk of dying, predicts its president


Alejandro Delgado, president of the National Institute of the Entrepreneur (INADEM), fears that the next administration will reduce investment to one-third of this institution and leave the entrepreneurs unprotected.

On the morning of November 8, Alejandro Delgado , president of the National Institute of the Entrepreneur ( INADEM ) received a discouraging news for the entrepreneurial ecosystem, a person close to the Ministry of Finance informed him, informally, that the budget for the presiding institution would be of one billion pesos in the next administration. 

In the last 12 years, 5,400 million pesos a year have been allocated to SMEs and entrepreneurs, on average. There was even a peak of up to 10,500 million pesos in 2014.

In 2018, the budget decrease left the INADEM with 3,900 million pesos with which they placed 507 thousand loans to 13, 200 productive projects. “It’s not a minor thing,” says Delgado in an interview with Entrepreneur en Español.

In the framework of the inauguration of the INCmty 2018 entrepreneurship festival, Delgado declared that, if the rumor is true, “without a budget, INADEM can exist but only in maintenance, you have it in a coma”.

In their respective administrations, Felipe Calderón allocated 40 billion pesos for SMEs and Enrique Peña Nieto, 39 billion pesos for entrepreneurs.

“The will of two administrations of different political parties to recognize the importance of supporting SMEs and 
entrepreneurs is clear,” says Delgado.

This work of two presidential periods has laid the foundations to form qualified entrepreneurial infrastructure.

Delgado considers that in this last administration, one of the achievements has been the approach of a public policy oriented towards entrepreneurs and the realignment of resources for their projects.

“Before INADEM, there was no qualified infrastructure for entrepreneurs that followed international standards. We started with 20 basic incubators and now we have 190. There were no high impact accelerators and there were no capital funds, now there are 5 billion pesos that have supported 188 investments “, shares.

The Organization for Economic Cooperation and Development ( OECD ) considers that the best instrument for financing SMEs in the world, based on their results, has been that of Mexico, of 42 countries evaluated.

In this sense, the second great success is the creation of means of financing through the system of guarantees by the historical record, that is 63% more than in the previous administration. “We carry 632 billion pesos placed in direct credit to SMEs through the guarantee system, through banking but backed by the institute,” presumes the official.

INADEM has supported 4.4 million entrepreneurs and contributed to the fact that, in 10 years, the survival rate of startups at two 
years of age has gone from 38% to 49%.

The states that have benefited most from INADEM’s support are Sinaloa, Jalisco, Mexico City, State of Mexico and Nuevo León. But at the moment it is working in “a very aggressive public policy for the south and south-east of the country to give infrastructure to the entrepreneurs”.

That is why it is important not to reduce the budget that has been allocated to INADEM, since the private initiative could not sustain this lack of investment.

The private initiative will have to be on the subject of capital, on the part of the entrepreneurial infrastructure, on the accelerators, on the incubators, but it can not be in subsidy processes, explains Delgado.

In addition, “in stages of high risk, in innovation, it is difficult to boost private initiative. There are things in which public policy is not substitutable, “says the official.

The challenge of the next administration headed by Graciela Márquez Colín, in the Ministry of Economy, is to continue sustaining this infrastructure that Delgado talks about “because in a restrictive monetary cycle the first thing that happens is that it is no longer lending to SMEs”.

Likewise, it is necessary to continue promoting entrepreneurship in terms of the internet of things, artificial intelligence, blockchain and data analysis, where Mexico has the talent to be a reference. world.

Delgado is convinced of one thing: “A country that does not bet on entrepreneurs and SMEs is condemned to be a follower of other countries.” 

Source: Entrepreneur

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