Mexico loan credit could rise to 17% of GDP in 2010 and 21% in 2011, compared with 15% in 2009, said Mexican Deputy Finance Minister, Alejandro Werner, yesterday.

The news follows assertions by banks last week that Mexico mortgage loans will grow by 15% this year, helping drive growth in the market as a whole.

The measure of bank loans as a percentage of gross domestic product serves as an indication of the use of bank credit, so the increase will be seen as another positive sign for the Mexican economy. This figure has traditionally been low in Mexico compared with other Latin American countries.

Mexico's Finance Ministry said the rise was due to Mexico loans benefitting from the recovery in the Mexican economy. Economists are predicting growth of over 5% in the Mexico's GDP this year, although the official government forecast is more cautious at 4.1%.

The increase in Mexico loan credit means lending balances could grow by $28.7 billion per year between 2010 and 2012.

Ignacio Deschamps, president of the Association of Mexican Banks, said growth in Mexico loans will probably reach "double-digit" figures in 2010.

Mexico's banks came through the financial crisis relatively undamaged with the biggest banks well capitalized and improving quality of assets at the beginning of this year.

Seven commercial banks dominate the Mexico loan sector, including the UK's HSBC, Spain's Santander and Citigroup from the U.S. Between them they account for around 87% of all loans and deposits.

Mexico mortgage loans have become much more accessible for foreigners in recent years. A number of lenders have entered the market for overseas borrowers and competition is producing well-priced Mexico mortgages, often with lower costs than in the borrower's home country.