Despite fintech boom, Mexico shows mixed results in banking for women

The pandemic has been a massive driver for financial inclusion in a region with large segments of the unbanked population.

Numbers have risen across the board in Latin America, and the evolvement of the fintech sector has been decisive in bringing more adult citizens to finance.

But in Mexico, despite fintechs making inroads in the past years, a recent government survey shows that progress has not been as swift as expected. That inclusion has lagged deeply, particularly in the case of women.

According to the Financial Inclusion Report, or ENIF, the number of Mexicans with at least one financial product declined in 2021 by 50 basis points to 67.8% in 2018.

The drop, however, is entirely driven by women’s lower usage of financial services. While the proportion of men who used those services grew in the period, women saw a steep decline during the pandemic from 65.2% to 61.9%, altogether driving the average down.

The same gap is valid for access. Most of the time, the number of Mexicans with bank or internet accounts has risen. It edged up by two percentage points to 49.1% since 2018. But once again, when broken down by gender, women have been left behind.

While access to savings accounts by men grew from 48.5% to 56.4% in the three years, women booked a decline from 45.9% in 2018 to 42.6% as of last year, the study found.

Women bore brunt of crisis

For Ernesto Calero, general manager at Mexico’s Fintech association, these numbers are linked to the job market’s performance during the pandemic, in which women appear to have borne the brunt of the crisis.

Ernesto Calero headshot
Ernesto Calero

“The main reason to have an account is that that’s where people get their salary,” he told Fintech Nexus. “If we take into account the huge proportion of women who had to leave their jobs during the pandemic, several women might have decided to close their accounts for fear of not having a minimum balance or paying commissions that traditional banks usually charge,” he added.

In early 2021, official data by the national statistical agency found that seven in every 10 Mexicans that had lost their jobs during Covid were women. The job market only recovered later this year, and the survey results likely reflect a relatively weak point for the market.

To be sure, though, Mexico’s financial inclusion challenges are structural. The country has long lagged among its regional peers, with one of the worst financial inclusion metrics among the region’s largest economies.

A recent survey found that cash remains king in an economy where 90% of small-sized transactions are done outside the banking system.

Fintechs double in number

With that gap in sight, Mexico’s startup ecosystem has spawned many fintech companies in the past few years.

According to the Inter-American Development Bank, the number of fintechs in Mexico, as elsewhere in Latin America, has almost doubled since 2018, growing from 273 to 512. It has also hatched several unicorn firms. Some of these fintechs have gained considerable size and drawn several venture capital funding rounds, including companies like Stori, Kueski, Klar, Clip, or Albo.

But while attracting millions of users, these startups are still struggling to move the needle around Mexico’s informal economy, where cash continues to be the main adversary.


On the other hand, state-owned initiatives have not been as successful as elsewhere. While the instant payment system PIX in Brazil incorporated roughly 110 million users, its equivalent in the North American country, CoDi, saw just minor traction, and only a third of Mexican adults are even aware of its existence.

To boost inclusion, fintech experts claim it is time to “modernize” its fintech law. The country was a pioneer in 2018 when it issued a tailor-made regulation for the sector. But four years later, voices in the industry argue that adjustments are needed fundamentally to regulate open banking in Mexico.

‘Fintech needs better regulation’

“I don’t think the sector needs more fintech regulation, but better regulation,” said Genaro Alarcon, a fintech adviser. Elsewhere in the region, Brazil has plowed ahead with an open banking framework for both banks and fintechs, while in Chile, a law is sitting now in Congress that would formalize data sharing between parties.

Since the government introduced its ‘fintech law’ in 2018, 34 licenses have been granted out of 100 companies that have applied, according to the Mexican Fintech Association.

“Although the regulation itself contemplates terms of up to 12 months from the formal request to the authorization to start operations, the reality is that in practice, in most cases, the process takes almost three years,” Calero said.

“For many decades, the Mexican financial system has operated under conditions of little competition, which is also one of the main causes of the results of low financial inclusion observed in the survey,” Calero said.

“Promoting the growth of more digital finance companies will allow reversing this negative trend.”


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