has launched a new strategy to expand lendingto small and medium-sized enterprises, which represent a key potential market forthe bank, El Economista reported, citingthe bank's business manager, Rafael Frías.

The bankis looking to provide credit to SMEs according to their specific needs at a lowercost than personal loans, Frías said.

Currently,less than 20% of SMEs in Mexico have a commercial bank account and just 7% havea bank loan, the July 19 report said. But with HSBC's new strategy, which is focusedon SMEs with annual billing up to 80 million Mexican pesos, SMEs could save up to30,000 pesos per year, Frías said.

For SMEs,the cost of a bank loan is about half of the cost of a personal credit card loanand a fifth of the cost of a loan offered by a non-bank lender, El Financiero reported, citing an interviewwith Frías.

The potentialmarket of SMEs in Mexico is huge, Frías noted, adding that they will play a crucialrole in providing jobs for young people in the coming years.

As of July 19, US$1 was equivalentto 18.58 Mexican pesos.