Despite the financing needs of Mexicans, the bank credit It has been down for 17 consecutive months.
Experts predict that credit will be more expensive this year, so loans will continue to be reduced.
Figures from the Bank of Mexico (Banxico) reveal that the current credit of the private banking it decreased 2.7% last December compared to the same month of 2020, when subtracting inflation.
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Funding has fallen since August 2020, the longest period of decline since data is available, beginning in 2004.
The main reason is the careful attitude of the bank at the time of grant creditsin order to avoid delinquency in this period of economic uncertainty due to the pandemic, shows an analysis by Deloitte.
Before looking for profits, banks are giving priority to keeping their losses to a minimum, strictly evaluating those who apply for loans, and financing only those who demonstrate that they can assume these commitments.
It stands out that loans to companies decreased 4.3%, which account for more than half of the total current portfolio and are linked to the development of new projects that give impetus to the economy.
Of the total number of companies, 33.9% indicated that they used commercial bank credits to finance their operations between October and December 2021, following 36.1% said they had done so three months earlier, according to the recent Conjunctural Evaluation Survey of the Banxico Credit Market.
The survey shows that the second biggest limitation for them to apply for or use new loans is the rates of the bank credit market, while the general economic situation is in first place.
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More expensive
Consumer credit became more expensive thanks to the higher interest rate in Banxico.
The rate on consumer bank financing averaged 29.2% per year last December, linking nine months to the rise and reaching its highest level since May 2020, says the National Banking and Securities Commission (CNBV).
Last week, the central bank raised its main rate to 6% and it is also its highest level since May 2020.
To contain inflation and its expectations, Banxico raised its rate from 4.25% to 5.50% in 2021, an increase of 1.25 points in the cost of money.
For this year, there are institutions —such as the BNP Paribas bank and the Coface insurer— that estimate that Banxico will raise its rate to 7.75%, which implies a rise of 2.25 points, that is, almost double what it rose in 2021. Financing will be more expensive this year due to Banxico’s adjustments, estimates Alfredo Coutino, director for Latin America in Moody’s Analytics.
“The bank credit will continue to be depressed this year,” he anticipated.
The deputy director of economic analysis at Vector Casa de Bolsa, Luis Muñiz, agrees that credits may continue to fall, since Banxico’s rate is going to rise this year: “The outlook for consumption (…) is not good, because we are going to have a rising Banxico rate”.
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