operating in Mexico; six <strong>of</strong> them have 83% market share by total assets and five newbanks are linked with retail stores.Mexico's commercial banking sector has been opened to foreign competition. The NorthAmerican Free Trade Agreement (NAFTA) permits U.S. and Canadian banks or anyother foreign bank with a subsidiary in the United States or Canada to establish whollyowned subsidiaries in Mexico. Further, they are allowed to undertake financial intermediationor to solicit customers for their parent bank. Almost all major banks, with theexception <strong>of</strong> Banorte, are under the control <strong>of</strong> foreign banks.Following the 1994 peso crisis, banks in Mexico have been very cautious in theirlending, preferring to provide loans only to their most sound customers. However, nowbanks are beginning to implement programs for lending to a wider range <strong>of</strong> companies,although at relatively high rates. <strong>In</strong> general, small and medium enterprises (SMEs) havetrouble accessing credit. The Mexican Government has enacted several incentives toencourage more lending to SMEs, and banks have followed suit with new lendingpolicies, but it remains to be seen whether the largest segment <strong>of</strong> the Mexican economywill gain better access to credit.The Secretariat <strong>of</strong> Finance, the National Banking and Securities Commission, and theBank <strong>of</strong> Mexico are the principal regulators <strong>of</strong> the banking system. The Secretariat <strong>of</strong>Finance is concerned with institutional issues such as licensing and sets credit and fiscalpolicies. The Bank <strong>of</strong> Mexico (the Central Bank) implements these policies and alsooperates inter-bank check clearing and compensation systems. The <strong>In</strong>stitute for theProtection <strong>of</strong> Bank Savings (IPAB, replacing the former institution FOBAPROA) acts asa deposit insurance institution. The National Banking and Securities Commission, asemi-autonomous government agency, is responsible for supervision and vigilance. TheMexican Banking Association (ABM) represents the interests <strong>of</strong> Mexico's banks.Development Banks:The mission <strong>of</strong> development banks is to fill financing shortfalls in the commercial bankingsector. Mexico has seven government-owned development banks that provide servicesto specific areas <strong>of</strong> the economy. The dominant institutions are Nacional Financiera(Nafinsa) and the Foreign Trade Bank (Bancomext). These institutions have becomeprimarily second-tier banks that lend through commercial banks and other financialintermediaries such as credit unions, savings and loans, and leasing and factoringcompanies. Nafinsa's primary program funds micro, small and medium-sizedbusinesses. Nafinsa also undertakes strategic equity investments and contributes equityto joint ventures. Bancomext provides financing to Mexican exports and to small andmedium-sized companies. It also <strong>of</strong>fers working capital, project lending, and training t<strong>of</strong>irms in several specific sectors that require support, such as textiles and footwear.The other Mexican development banks are BANOBRAS (Public Works <strong>In</strong>frastructureBank), FINANCIERA RURAL (Rural Agriculture Bank), BANSEFI (National Savings andFinancial Services Bank), BANJERCITO (Mexican Army, Air Force and Navy Bank) andHIPOTECARIA FEDERAL (which finances Mexican homeownership through financialintermediaries).New Non-Banks:The non-traditional banking sector in Mexico is comprised generally <strong>of</strong> newcomers thatdid not exist fifteen years ago. These recently developed institutions are lending to
individuals who are equally new to the industry – people that have little, poor or no credithistory.Most <strong>of</strong> these newly developed lending institutions are members <strong>of</strong> the MexicanAssociation <strong>of</strong> Specialized Financial Entities (AMFE), which encompasses two maintypes <strong>of</strong> non-traditional lenders: Limited Purpose Financial <strong>In</strong>stitutions (SOFOL’s) andMultiple Purpose Financial <strong>In</strong>stitutions (SOFOM’s). Most <strong>of</strong> the newest firms in themarket are SOFOL’s due to the inherently decreased credit risk present when theborrower’s specific activities are known and by law, they must convert to a SOFOM or atraditional lending institution within seven years.As <strong>of</strong> October 2009, the AMFE collective network <strong>of</strong> SOFOL’s and SOFOM’s has over7.5 million loans issued. Delinquency in consumer loans increased from 3% to 9% overthis period. The mortgage sector is the most affected by the financial crisis.Foreign-Exchange ControlsReturn to topThere are no controls on the transfer <strong>of</strong> U.S. dollars into and out <strong>of</strong> Mexico. This meansthat pr<strong>of</strong>its can be repatriated freely.U.S. Banks and Local Correspondent BanksReturn to topThere are many U.S.-based banks active in the Mexican market, particularly U.S.brokers and banks working with ExIm programs. The U.S. Commercial Service Mexicomaintains a list <strong>of</strong> these banks. Please contact Sylvia Montano,Sylvia.Montano@trade.gov for more information.Project FinancingReturn to topBanks, investor groups, large institutional investors such as insurance companies, public<strong>of</strong>ferings <strong>of</strong> bonds, and other capital market instruments <strong>of</strong>ten provide financing. Suchfinancing is in its infancy in Mexico as the Government <strong>of</strong> Mexico (GOM) has previouslybeen the owner <strong>of</strong> these types <strong>of</strong> projects. The financing required by the GOM has beenhandled either through large international loan syndication direct to the federalgovernment or its operating entities or through multilateral credits.Mexico has entered a new era in granting concessions for seaports, airports, railroads,satellite communications, power generation plants, and natural gas distribution systems.<strong>In</strong> general, Mexican and foreign firms that win bids and tenders need to finance majorpurchases <strong>of</strong> both equipment and services.U.S. ExIm Bank http://www.exim.govThe Export-Import Bank <strong>of</strong> the United States (ExIm Bank), an independent agency <strong>of</strong> thefederal government, <strong>of</strong>fers various short, medium and long-term export finance andinsurance programs. Of specific interest to U.S. exporters are the guarantees formedium-term loans to foreign buyers <strong>of</strong> capital equipment. Most loans are made by U.S.banks with ExIm Bank’s guarantee. ExIm has approximately $7 billion USD in exposurein Mexico making it one <strong>of</strong> ExIm Bank’s top markets.
- Page 1:
Doing Business in Mexico: 2010 Coun
- Page 4 and 5:
Return to table of contentsChapter
- Page 6 and 7:
Before signing an agent/distributor
- Page 8 and 9:
In order to satisfy clients’ dema
- Page 10 and 11:
egardless of their geographic proxi
- Page 12 and 13:
The following companies organize tr
- Page 14 and 15:
to create a solid contract that inc
- Page 17 and 18:
Web ResourcesReturn to topU.S. Gove
- Page 19 and 20:
AgribusinessOverviewReturn to top20
- Page 21 and 22:
Automotive Parts and SuppliesOvervi
- Page 23 and 24:
ResourcesState of Jalisco Auto-part
- Page 25 and 26:
• Corporate training programs in
- Page 27 and 28:
excluding large hydroelectric proje
- Page 29 and 30:
Environmental SectorOverviewReturn
- Page 31 and 32:
Franchising SectorOverviewReturn to
- Page 33 and 34:
Hotel and Restaurant EquipmentOverv
- Page 35 and 36:
Housing and Construction ServicesOv
- Page 37 and 38:
Internet and IT ServicesOverviewRet
- Page 39 and 40:
Packaging EquipmentOverviewReturn t
- Page 41 and 42:
With this boom in the packaging sec
- Page 43 and 44:
• Integrated security solution(co
- Page 45 and 46:
CATV: Today 30% of homes have pay-T
- Page 47 and 48: and expanding facilities and servic
- Page 49 and 50: destinations are typically not popu
- Page 51 and 52: The United States’ major agricult
- Page 53 and 54: 5.- Fresh Fruit (apples, pears, gra
- Page 55 and 56: ResourcesReturn to topThe USDA’s
- Page 57 and 58: order region and 16 percent for pro
- Page 59 and 60: U.S. Export ControlsReturn to topMe
- Page 61 and 62: and organs, almost all medical prod
- Page 63 and 64: Organizations that develop NMX - Me
- Page 65 and 66: Certification Bodies:EMA has accred
- Page 67 and 68: The LFMN and its Regulation establi
- Page 69 and 70: NOM-137-SSA1-2008 Regulatory inform
- Page 71 and 72: Mexico is the country with the larg
- Page 73 and 74: Return to table of contentsChapter
- Page 75 and 76: SECTION 2: SECTORS RESERVED FOR MEX
- Page 77 and 78: majority share (about 75 percent) o
- Page 79 and 80: Expropriation and CompensationRetur
- Page 81 and 82: contribution. The Mexican Bank for
- Page 83 and 84: Government continues to work with i
- Page 85 and 86: to banks and non-bank banks. Despit
- Page 87 and 88: government sent the sent the Federa
- Page 89 and 90: Business Transactions (OECD Antibri
- Page 91 and 92: • Information about the OECD Anti
- Page 93 and 94: Greece, Italy, Netherlands, Portuga
- Page 95 and 96: Foreign Direct Investment Realized
- Page 97: Return to table of contentsChapter
- Page 101 and 102: sector, which is expected to uncove
- Page 103 and 104: Return to table of contentsChapter
- Page 105 and 106: For further information please visi
- Page 107 and 108: Local Time, Business Hours, and Hol
- Page 109 and 110: Mr. Garth ThorburnDirector, U.S. Ag
- Page 111 and 112: Asociación Nacional de Importadore