Delinquency at Sofipos rises: Banxico ties the deterioration to slower growth and inflation pressures
Mexico’s weaker economic momentum and bouts of inflation are showing up as more missed payments at Popular Financial Institutions (Sofipos), a segment that has gained ground thanks to the digitization of services and its offering of savings products with attractive yields. An analysis by the Bank of Mexico (Banxico) finds that when growth softens, employment and households’ disposable income lose steam, which reduces repayment capacity and pushes up delinquency in consumer credit.
Data from the National Banking and Securities Commission (CNBV) as of September show that 36 Sofipos operate in the country. Alongside their expansion—particularly in loan origination—the sector posted a delinquency ratio of 9.9%, well above the 2.27% seen in commercial banks. The gap doesn’t just reflect different customer and product profiles; it also suggests that Sofipos are absorbing a meaningful share of financing demand from households that are more sensitive to income, employment, or price shocks.
In the study “Determinants of Delinquency in the Consumer Loan Portfolio for Sofipos,” Banxico argues there is an inverse relationship between economic growth and delinquency: during expansion phases, job creation and wage gains strengthen consumers’ cash flow and make it easier to service debt. By contrast, in periods of marginal growth, late payments tend to rise. This reading is especially relevant in a context where Mexico’s economy has shown signs of slowing, with uneven performance across sectors: U.S.-linked manufacturing and some services have seen ups and downs, while investment has been constrained by still-elevated borrowing costs and episodes of uncertainty on multiple fronts.
For 2025, the central bank projects growth of around 0.4%. While a broad-based contraction did not materialize, that pace is not enough to meaningfully lift real income across the board, particularly for households that devote a large share of their budgets to food, transportation, and housing. On top of that, even though inflation has remained within the central bank’s variability range, it picked up in November—underscoring that the path of prices can be uneven even in a setting of gradual disinflation.
The effect of inflation on delinquency, according to Banxico, is not mechanical: it depends on whether the loss of purchasing power (which weakens repayment capacity) dominates, or whether inflation lowers the real cost of debt (which could ease some balance sheets). Still, the central bank concludes that, on average, a one-percentage-point increase in annual inflation or in the real interest rate is associated with an increase of roughly two percentage points in Sofipos’ consumer-loan delinquency. The implication is that a less stable price environment or restrictive real rates can hit harder for intermediaries that serve segments more sensitive to the economic cycle.
Sofipos’ rapid growth in recent years—driven by digital players, fast origination, and commercial strategies to attract deposits—has expanded their reach. Banxico estimates the sector now has more than 12 million borrowers. For users, this has meant alternatives to traditional banking; for the financial system, it raises the challenge of ensuring that expansion is not accompanied by looser underwriting standards, risk management, and provisioning, especially in consumer products where deterioration can happen quickly.
From a financial stability perspective, Banxico emphasizes that Sofipos remain small compared with the banking system’s assets and have limited interconnectedness with other intermediaries, so they are not considered systemically important. Even so, the central bank warns that as their size grows, monitoring their indicators—particularly delinquency—will become more important to ensure the sector develops prudently. This matters in a country where financial inclusion is advancing, but where a share of households remains vulnerable to income shocks, labor informality, and price increases.
Looking ahead, delinquency at Sofipos will be tied to the trajectory of employment, the evolution of real wages, and the speed at which disinflation becomes entrenched. Factors such as the cost of funding—in an environment where Banxico has been adjusting its monetary stance gradually—households’ appetite for credit, and Sofipos’ ability to strengthen collections practices, risk analysis, and financial education for users will also play a role. The regulatory and supervisory response, as well as transparency in information provided to savers and borrowers, will be key to sustaining confidence in a segment that combines innovation with a risk profile different from that of traditional banks.
In sum, Banxico’s assessment suggests that slower growth and inflation episodes have pressured the repayment capacity of households served by Sofipos, pushing delinquency to levels significantly higher than those of banks. While the sector does not currently pose a systemic risk, its rapid expansion makes it essential to keep a close watch on portfolio quality, underwriting, and macroeconomic conditions to ensure its growth is sustainable.
