4/4/2023 - Economy and Finance

Mexicans take debt to pay debts

By Melisa Murialdo

Mexicans take debt to pay debts

Most of the families residing in Mexico are indebted; the unforeseen resort to known loans and the banking credits are those that have the highest rate of morbidity.

THE MAYORY OF THE MEXICAns IS ENDEUDED

57% of Mexicans have debts

21 million people living in Mexico have debts valued at 1.6 billion dollars; 4.2 million have mortgage debts and 19.7 million households have non- mortgage debts: with credit cards, wages or personal, banking credit, etc.

Although 95% of Mexican debts are not linked to housing purchase, the value of mortgage debts is higher for the latter.

The segment with higher consumption mortality is that of personal loans

More than 90% of Mexicans do not feel overly indebted, but in turn express that They only come to them for the necessary or not even for that. When they have some economic unforeseen, they prefer to resort to acquaintances than a banking institution.

Most Mexicans (64.9%) pay their unforeseen expenses using family and friends loans, the rest:

  • 35.5% of the sale or commitment of some good,
  • 21.7% wage advance,
  • 19.7% savings and
  • the lowest percentage, 17% resort to the bank to take bank credits
As regards the credit granted by banking institutions, There is a clear general reduction in consumer credit granted by the bank in all types of credit, especially in the case of personal loans and credit cards.

For 2021, A decrease in consumption by citizens is visible, As a precaution to the brake on the economy. The consumption credits had a greater decrease in the total portfolio (except the car, mobile goods and leasing). Pandemic brought a decrease in Adjusted morosity index (IMORA) total segments. The morbidity observed in total consumption reached 12.17 points, surpassed only by the morbidity of personal loans and credit cards. The segment with the highest mortality remains the portfolio of personal loans, but to a low extent in relation to pre-pandemic levels.

It is then seen that Mexicans do not largely use the banking loans they could count on to face debts or make consumption. It can be considered a distrust in the financial sector both public and private.

What do Mexicans pay with the loans they take?

Mexicans are indebted to pay debts

The main destination of Mexican credit is to pay other debts that suffocate them financially. That is, they take debt to pay debts.

For years, it has been conduct among residents of the country, but currently the amount exceeded 50%, half of the loans requested are directed to that destination.

By Public Counter Melisa Murialdo

Information sources:

INEGIBank of MexicoMT Financial Education Blog_National Banking and Values Commission (CNBV)

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melisa murialdo

Melisa Murialdo

Hi, my name is Melisa Murialdo, I'm a Public Accountant at the National University of Córdoba. I have a Diploma in Digital Marketing, Social Media and Electronic Commerce from the Technological University of Buenos Aires. In addition to this, I am an Analyst for statistical data and economic reporting from the Latin American region.

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