Home Business-newBusiness Due to Nearshoring, Mexican banks expect an increase in financing demand in the next 5 years

Due to Nearshoring, Mexican banks expect an increase in financing demand in the next 5 years

by Yucatan Times
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For more than a year now, commercial banking in Mexico has seen euphoria unleashed by large companies, which are requesting loans to build plants.

“55% of banks indicated that in the last 12 months they have observed an increase in the demand for credit from large companies due to factors related to relocation,” revealed the Bank of Mexico (Banxico).

In addition, 88% of banks indicated that they expect an additional increase in financing demand in the next five years derived from the nearshoring phenomenon, according to Banxico’s Survey on general conditions and standards in the bank credit market (EnBan). 

The survey was carried out on 29 banks, which have seen that national and foreign companies already established in the country have increased their production in Mexico, while other companies have arrived with investments.

“Over the forecast horizon, the process of relocation of some companies to Mexico that is underway is expected to give a certain boost to economic activity, recognizing the high uncertainty that exists regarding its possible magnitude and effects,” states the central bank in the study.

During 2023, more than 120 companies have made public investment announcements, which represents investments of $44 billion on a multi-year basis, according to Santander Mexico’s Nearshoring Data Monitor.

These ads come 55% from companies in the United States, 20% from China, 7% from Argentina, 3% from Belgium, 2% from Germany, 1% from Taiwan and 11% from other nations.

The consulting firm Market Analysis points out that more than 71 American companies and 37 Chinese companies have rented spaces in industrial parks to install production lines from January to September of this year.

The companies rented industrial parks in Aguascalientes, Mexico City, Chihuahua, Guadalajara, Guanajuato, Ciudad Juárez, Matamoros, Monterrey, Nuevo Laredo, Puebla, Querétaro, Reynosa, Saltillo, San Luis Potosí, Tijuana and Toluca.  

Mexico’s solid fundamentals contribute to making it an attractive investment destination for foreign companies, Victoria Rodríguez Ceja, governor of the Bank of Mexico, commented yesterday. 

“The nearshoring process contributes to the dynamics of economic growth continuing to strengthen,” he added.

The official explained that nearshoring is a process that is already reflected in surveys conducted in different economic sectors.

“They share with us more and more that they are in different stages,” he indicated. “We know that investments require a long planning process, in such a way that there are companies that are in these stages, some others are already initiating credit applications and the banks have expressed to us in an important way the signals and requests they are receiving. linked to this process.

“Nearshoring can be a source of growth for our country,” highlighted the governor of Banxico.

TYT Newsroom

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