Financing of the private sector in Mexico, 2000-05: evolution, composition, and determinants

Constantinos Stephanou () and Emanuel Salinas Munoz

No 4264, Policy Research Working Paper Series from The World Bank

Abstract: The objective of this paper is to describe the evolution, composition, and determinants of financing to the nonfinancial private sector in Mexico between 2000 and 2005. Supported by the macroeconomic environment and financial system reforms, total financing to the private sector (particularly consumer credit) increased relative to GDP, while accessibilityand affordability generally improved. Equity issuance did not play an important role during the period under consideration. Although the supply of financing shifted toward domestic nonbank providers, commercial banks remain the primary source of funding. Significant progress was made in cleaning up bank loan portfolios and in strengthening financial system soundness and infrastructure. The prospects for continued private sector financing growth remain very positive, but financing is not spread out evenly across all market segments. The authors conclude with some policy implications to further facilitate deeper and broader financing of the private sector.

Keywords: Banks&Banking Reform; Financial Intermediation; Economic Theory&Research; Public Sector Economics&Finance; Financial Crisis Management&Restructuring (search for similar items in EconPapers)
Date: 2007-06-01
New Economics Papers: this item is included in nep-ban, nep-dev and nep-his
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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