Publication

Project publication

Liberalization of Financial Services Under NAFTA and Its Effect on the Environmental Performance of the Agricultural Sector in Mexico

Description

As a result of its peso crisis in 1994–1995 and the need for capital, the Mexican government accelerated the financial liberalization process projected under NAFTA, increasing foreign ownership of banks. These changes and ensuing legislation greatly affected the credit market in Mexico.

In general, research has shown that larger banks tend to prefer lending to large businesses as well as large-scale farmers, given the fact that their managerial structure makes the evaluation process for small businesses and farm loans costly and unprofitable.