With its craggy buttes and cactus-spiked hills, the Sierra Mixteca is a frontier of Mexican banking. Ramón Gómez and Oscar Xicotencatl, executives at HSBC Mexico, have driven here from their offices in the city of Puebla, several hours north, to spread the gospel of savings accounts, debit cards, personal loans and mortgages to farmers and villagers who have always dealt in cash and avoided banks. "It's a big potential market for us," says Xicotencatl, assistant director for HSBC in four central Mexican states. "But it's also a real challenge," adds Gómez, who is the bank's director for the same region.

The potential and the challenge are in full view in this southern corner of the state of Puebla. Traditionally one of Mexico's poorest regions, the Sierra Mixteca is being transformed by millions of dollars in remittances sent home by young locals who have moved to New York, mostly as illegal migrants. In small towns like Tulcingo del Valle and Piaxtla, fast-food pizzerias and cybercafés crammed with computer stations have replaced pulquerías, those old-time saloons with swinging doors. Instead of ancient adobe hovels, new brick-and-concrete houses are everywhere, with satellite dishes sprouting from their roofs.

But despite swelling purchasing power, local people see no advantage in using financial products such as credit and debit cards or loans. Their homes sit on communally owned property -- part of the ejido farmlands created by agrarian reform after the Mexican Revolution of 1910­'21, which makes it legally and financially difficult for HSBC Mexico, a subsidiary of HSBC Holdings, to issue mortgages. According to the bank, more than 70 percent of all commercial transactions in Mexico are in cash -- compared with about 30 percent in the U.S. But in the Sierra Mixteca, more than 90 percent of all transactions are in cash.

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