Latin America's second largest economy has created a solid banking system with liquid and well-capitalised banks and healthy ratios of non-performing loans, which has encouraged both local and international banks to expand their businesses in the country. Yet Mexico continues to display one of the lowest banking penetration levels in the region. Private sector credit makes up only about 30% of gross domestic product (GDP), compared with more than 100% in Chile and about 70% in Brazil, according to the World Bank. Despite the presence of a significant number of different financial institutions in Mexico, banks play a major role in such statistics.
Bringing financial services to larger parts of the population is a major concern for the Mexican government, which has set a 40% penetration target by the end of the current administration in 2018. At the same time, the financial inclusion gap, coupled with progress in technology and regulatory changes, also presents business opportunities. This is true particularly for younger customers, who are more receptive to mobile channels, and will shape the middle-class banking requirements of the future.
