Mexico requests banks do more lending
Namely to big government-backed projects and smaller businesses.
The Big News Breakdown. Unpacking this week’s most important news.
The Mexican government has been on a charm offensive with Mexico’s biggest lenders. Financial institutions of all kinds—from old global banks, like HSBC, to local fintechs—were summoned first by Mexico’s President and then by her Economy Secretary to drum up more investment in the country.
Their request to the banks was an old one: Lend more to Mexicans. Indeed, credit in Mexico is substantially lower even than in other, less developed economies. This, in turn, has limited economic growth in a country where big investors are waiting in the wings for geo-political turbulence to pass and where the government is reluctant to increase public spending.
Credit is consequently what’s needed, and especially for those small and medium enterprises (SMEs) that struggle to get any loans whatsoever. President Claudia Sheinbaum went as far as to complain that, in other countries, SMEs are offered credit even if it is at extortionate rates… but at least they have access to it.
The usual steps are being taken to increase lending rates. Red tape is being cut and financial institutions are getting more backing to take higher risk bets on SMEs.
Konfío, a smallish fintech compared to the banking titans in the room, pledged to lend $2.5 billion dollars to SMEs from 2026 and 2028. (Perhaps a clever way of speeding the approval of its banking licence). Larger institutions said “big announcements” would be made this week.
The government is taking these steps in the face of growing economic headwinds. Despite taking a more business friendly approach than her predecessor, during her watch Sheinbaum has seen year-on-year loan rates fall.
Source: Bank of Mexico
Going for broke on the basics
Despite good feelings and optimistic words by the bankers, the government is still expected to lead in these economically uncertain times.
Consequently, Mexico’s government and State development banks are being asked to take the lead. The promise is, behind them, will come backing for essential projects.
The bankers’ meeting with the president promised core infrastructure investments, including electricity transmission and renewables (which may have already been in the pipeline given that 2026 saw the coming into force of the country’s new Electricity Reform). There was also mention of roads and trains.
There is still a large missing middle. The big government investments being backed by the banks are essential but nevertheless means to an end—roads to move products; electricity to manufacture them. There still need to be big investments by companies actually producing the goods to make and move around.
Despite the government promise to give credit access to at least 30% of the country’s SMEs by 2030, smaller businesses simply won’t be able to fill in the missing growth Mexico needs in the short and medium term.
Once again, a lack of specificity as to where the government’s industrial priorities lie was a complaint among investors. “My worry is that little gets done in these forums with so many people,” a banker from a global financial institution told The Mexico Political Economist.
