Mexico banking: Low-income Mexicans to buy banking off supermarket shelf
House painter Miguel Hernández has dreamed for years of buying a house and a car for his wife and three children. However, as one of the millions of Mexicans without a bank account, he has always been denied credit. But his luck could change in June when US-owned superstore Wal-Mart de Mexico opens banking services, joining a growing roster of local retailers moving into banking for low-income earners. "I’ve shopped at Wal-Mart for years, they know me and I hope they’ll let me open an account. It would change everything," says Hernández.
In one of the most daring developments in Latin American banking, stores such as Mexico City-listed supermarket chain Soriana are announcing plans to target Mexicans who have traditionally been neglected by mainstream banks. Retailers ranging from electronic stores to wholesalers will open banking services in their shops this year, offering car financing, small loans, insurance and eventually mortgages.
For Wal-Mart, which has named its bank Adelante, "get ahead" in Spanish, banking could add 20% to its annual earnings in Mexico by its fifth year of operation, according to Merrill Lynch.