MEXICO Law and Practice Contributed by: Julián J. Garza Castañeda and Paulina Bracamontes Belmonte, Nader Hayaux & Goebel
1. Loan Market Overview 1.1 The Regulatory Environment and Economic Background
but in 2025 the Central Bank has opted to lower the interest rate by several points. In accordance with the latest financial stability report issued by the Mexi- can Central Bank, the Mexican financial system has shown resilience in a global context characterised by a slowdown in economic activity and trade tensions; however, significant challenges lie ahead, including a slow down in the Mexican economy, a need to foster private investments and the upcoming review of the United States, Mexico, Canada Free Trade Agreement in 2026. Markets in Mexico are fairly liquid and loans are flowing in a variety of forms, including in Mexico and across the border. The Mexican banking system remains sta- ble, and the appetite among foreign lenders to invest As Mexico does not have significant commercial rela- tions with either Russia, Ukraine, Palestine or Israel, the direct impact of international conflicts on the Mex- ican economy has been limited. However, such inter- national conflicts, combined with escalating geopoliti- cal tensions, have exacerbated the global inflationary trend and increased the volatility in the markets. As a result, the Mexican Central Bank raised and main- tained high interest rates throughout 2023 and 2024 (a tendency that started to change in early 2025 with a decrease of interest rates). Despite these headwinds, the loan market in Mexico has shown resilience, with positive performance in 2024 and 2025. The recovery of financial intermediaries’ activities and effective risk management have collectively bolstered the loan mar- ket’s performance. Fintech and non-traditional lenders gained traction by offering more accessible credit solutions, particu- larly for underserved individuals and small business - es. However, their rapid growth brought increased regulatory oversight and fraud concerns, prompting tighter digital lending standards. Meanwhile, inter- national investors looking to diversify away from tra- ditional markets began showing interest in Mexico’s loan market, especially in sectors tied to nearshoring, infrastructure, and renewable energy. in Mexico continues to be robust. 1.2 Impact of Global Conflicts
Macroeconomic and geopolitical conditions, along with the emergence of new competitors, have rede- fined Mexico’s banking sector in 2025. These chang- es have prompted various institutions to readjust their strategies in order to maintain productivity and strengthen their market positioning. During the last part of 2024 and the first half of 2025, several institutions that originally operated as fintechs obtained authorisation to become banks or other sorts of financial institutions, significantly transforming the financial landscape and intensifying competition across the sector. Understanding the economic developments of the past years is essential to fully grasp the current land- scape. The recession triggered by the COVID-19 pandemic in 2021 certainly impacted the loan market in Mexico as in most other jurisdictions. Needless to say, eco- nomic conditions changed dramatically, altering both the demand for and supply of financing. The pandemic’s repercussions were further evidenced by an increase in loan defaults. With many companies at risk of failing to meet debt obligations, as well as the risk of Mexican banks facing severe capitalisation and reserve challenges, the Mexican banking authori- ties introduced temporary regulations to mitigate such issues. While 2022 brought renewed optimism for growth in certain markets, which remained stable throughout 2023, the lingering global economic impact of the pandemic and disruptions to supply chains presented significant hurdles. The ripple effects of the pandemic in 2021 and 2022, coupled with current geopolitical tensions, contribut- ed to a global inflationary trend which lasted through- out 2023 and 2024. In line with international trends, the Mexican Central Bank raised and maintained high interest rates during 2024 to mitigate rising inflation,
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