Globalization of Banking and Local Access to Financial Resources: A Case Study from Southeastern Mexico

Since 1999 foreign financial institutions have acquired six of Mexico’s eight largest banks as part of a process of wholesale financial liberalization and economic integration. To date, however, no empirical research has been carried out to assess the implications of the transformation of Mexico’s financial system on access to credit among low and moderate-income households. The primary objective of this study is to assess how the processes of globalization and economic liberalization have affected access to formal and informal financial resources in Mexico. A case study approach, based on a household survey in Valladolid, Mexico, is presented to determine how low and moderate-income households gain access to financial resources. In addition, the study quantifies the distribution of formal and informal credit and identifies the relative importance of formal and informal financial institutions