Payroll Loans: BBVA, Banorte, and Banamex Dominate the Market

BBVA, Banorte, and Banamex are the top players in the payroll loan market in Mexico. According to data from the National Banking and Securities Commission (CNBV), for every four clients with these loans, three obtained them from these institutions. At the end of last year, a total of 15 banks issued payroll loans amounting to 401,187 million pesos, with 75% of that coming from these three major banks.

Experts believe that, although the growth of payroll loans is less dynamic, it will continue to rise as interest rates decrease and unemployment remains at low levels. "Unemployment remains very low and that's also contributed to the increase in the minimum wage," commented Ariel Méndez, an analyst at Grupo Financiero Ve por Más (Bx+). For 2024, the increase in the issuance of payroll loans has been slower compared to 2022 and 2023. According to Ariel Méndez, this is more due to market conditions than an economic slowdown. "There are more competitors looking to offer products, giving consumers more options to decide who to go with. While multiple banks may be a bit behind, I don't think that's a cause for concern," Méndez assured.

What’s Happening with the Delegated Collection Reform? In 2022, a proposal was made to allow banks to request employers to directly deduct monthly payments from the salaries of debtors, and even from other benefits like bonuses or profit sharing. This initiative was suspended in March 2023 and has returned to the Senate this year. Ariel Méndez explained that certain loans, such as those in the teaching sector, already have automatic salary deductions. "For teachers, if they receive three salary payments together during the summer break, the loan is automatically charged from those three payments," he indicated. If this practice were to extend to traditional banking, clients could face significant issues, according to Condusef. "The over-indebtedness that many public sector workers face, whether federal, state, or municipal, has led many of them to earn income that is well below their basic needs," he warned. This situation creates a serious social problem and causes considerable disinterest in public service tasks.

It is important for both consumers and financial institutions to stay informed and cautious about credit trends and proposed reforms. Financial education plays a crucial role in preventing over-indebtedness and ensuring responsible personal finance management. Properly leveraging available credit options, like payroll loans, can be a useful tool, but it’s vital to understand the associated conditions and risks.