Mexico's government aims to boost lending by making it easier for banks to collect on guarantees for bad loans and by giving new powers to regulators to punish firms that do not lend enough, according to a draft of a new banking reform.
The proposal, a copy of which was seen by Reuters, is due to be presented next week, and is part of a raft of measures aimed at ramping up growth in Latin America's second biggest economy.
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Thrashed out within a pact made between President Enrique Pena Nieto and the leaders of the main opposition parties, the banking reform targets Mexico's conservative banks, which boast high capital levels but lend much less than their foreign peers.
"Granting more loans, under more favorable conditions in terms of interest rates, duration and amounts, is a crucial element to efficiently allocating financial resources to boost national economic growth," the draft says.
(Reporting by Alexandra Alper; Editing by Andrew Heavens)