Banxico rate hike makes loans more expensive: AMB

Given the recent growth in the general interest rate by the Bank of Mexico (Banxico), the Association of Banks of Mexico (ABM) reported that, although the adjustment was already reflected, the different banking institutions maintain loans competitively, since there is some room for dynamism.

By raising the reference rate that Banxico forecasts, it is equivalent to fewer credits being requested, since interest is triggered to liquidate them, and this affects companies and those who request loans through their payroll. According to ABM data, they show an increase compared to last year.

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Increases in business and payroll loans

Compared to 2021, this year there is an increase in the interest rate on business loans of 1.12% and 1.11% for payroll loans, with information from the Association of Banks of Mexico.

Dynamism between banks

Although the interest has had a definitive increase to the previous year, Banxico trusts in the great dynamism among the banking institutions.

For his part, the president of the ABM, Daniel Becker, commented on the subject, “banks have made a great effort to maintain rates and therefore what we have observed is very marginal growth that does not reflect the same growth of the interest rate. Bank of Mexico”.

I also add that borrowers who have their credits at a fixed rate do not have to worry because they will not be affected by a rise in interest due to inflation.

How it affects users who want to request a loan

As explained by the former president of Inegi, Julio Santaella, at a higher reference interest rate, the demand for loans by payroll users and entrepreneurs decreases, as does the supply of these loans: “A higher interest rate implies a greater risk of recovery of portfolio, reason why the financial intermediaries choose to ration it”.

All this is relevant information if you plan to acquire a payroll or business loan, opt for a fixed rate if possible or take into account the rise in general interest due to inflation that has been affecting the country since last year.

For more information on this and other topics, you can visit our Credits section.

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