Abstract:
Bank penetration in Mexico is one of the lowest in Latin America. Further, quarterly surveys carried‐out by the Central Bank shows that trade credit is used by a percentage of firms that is twice those that use credit from banks. Notwithstanding such result, there is no empirical work that may help understand what type of firms demand and use trade credit. Using data provided by a recent national survey, we find that the most likely firms to use trade credit are big, formal and have access to banking credit. Thus, the use of trade credit may not constitute a good indicator of the state of credit rationing.
