(Corrects attribution of quote in 8th paragraph to President
Enrique Pena Nieto Mexican, not Guillermo Ortiz)
By Tomas Sarmiento and Krista Hughes
MEXICO CITY May 20 Mexico's banking reform will
take two or three years to have an impact on credit and access
to financial services, said the chairman of Mexico's largest
locally-owned bank, Grupo Financiero Banorte.
The reforms, unveiled earlier this month, aim to increase
lending in Latin America's second-largest economy to improve
development of the small business sector and boost growth.
But Guillermo Ortiz, also a former finance minister and head
of the central bank, said it would take time for the reform to
seep through to the real economy, where many workers have jobs
in the informal sector and don't have bank accounts.
"The banking reform will not have a notable impact in the
short term," Ortiz said at the Reuters Latin America Investment
"If it is successful, we'll see an acceleration in financial
penetration after two or three years."
Mexican banks, which include the local units of Spain's BBVA
and U.S. bank Citigroup, are well capitalized
but conservative lending practices mean private sector financing
stands at just 26 percent of gross domestic product - below
Brazil, Argentina, Uruguay, Peru and Chile.
Ortiz declined to give a forecast on how much credit could
increase as a result of the reform, but pointed to the success
of reforms in Brazil. Private sector credit in Brazil jumped
from less than 25 percent of GDP to 35 percent between 2004 and
2007 after changes in the 1990s and early 2000s.
"In Mexico we have one of the most solid and healthy
financial systems in the world, but at the same time one of
those which lend the least," President Enrique Pena Nieto said
in launching the reform.
Ortiz said the large informal sector, which employs 60
percent of the workforce, made it impossible for banks to
properly gauge credit risk.
Shrinking the informal sector is one of the objectives of
fiscal reform that Finance Minister Luis Videgaray is preparing
and aims to present later this year.
The finance ministry estimates small- and medium-sized
companies generate nearly three-quarters of Mexican jobs but
receive just 15 percent of credit.
Central bank governor Agustin Carstens has said the reform
could add around 0.5 percentage point to growth in two or three
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(Writing by Krista Hughes; Editing by Kieran Murray and Chris