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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.

"I've never even seen a check around here," says Arturo Robles, a rancher on a visit to the weekly Piaxtla livestock fair to buy a stud bull. For payment, he uses a thick roll of pesos -- amassed from the monthly remittances wired by his son, a restaurant worker in Manhattan.

Remittances from the estimated 9 million Mexicans living in the U.S. reached $20 billion in 2005, according to Banco de México, the nation's central bank. That's too much money for HSBC and other global banking giants to ignore. Of the total, about $2 billion was carried as cash to Mexico by returning migrants. The remaining $18 billion was sent electronically. But in most cases, the only fees the banks collected came from their role as clearing agents for money transfer operators, such as Western Union, MoneyGram and DolEx. "Banks partner with us because we have many more outlets than they do" near Mexican immigrant communities, says Cynthia López, Mexico City­based assistant director of international business for DolEx. "Also, they still haven't learned how to reach out to Mexican customers in the U.S." That hasn't kept banks like HSBC from wooing those customers with other financial services. "We are trying to add value to those tremendous remittance flows, both for the beneficiaries and for ourselves," says Juan Lavalle, Mexico City­based director of remittances and international products at HSBC Mexico.