Bank penetration in Mexico is one of the lowest in Latin America. Further, quarterly surveys done by the Central Bank of Mexico shows that trade credit is used by a percentage of firms that is twice the figure that relies on credit from banks. Notwithstanding such result, there is no empirical work that may help understand what type of firms demand trade credit and which ones use it. Making use of a recent national survey, we find that while smaller and very likely credit rationed firms demand this type of financing, bigger, formal and with access to banking credit are the most likely firms to use trade credit.

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