In Mexico’s financial system, there’s something of a vacuum. The consumer credit industry is booming, but many small and medium-sized enterprises are unable to access adequate banking systems and credit, leaving them heavily reliant on cash and struggling with liquidity.
But these SMEs, like the small tortilla stands found on every street corner or the artisan brands celebrating Mexican heritage make up 95% of all Mexican businesses, contribute 52% of Mexico’s total GDP and formally employ 68% of the population. If properly served by the financial system, they could play a huge role in turbocharging the Mexican economy.
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Failed by the system
The traditional banking sector in Mexico is a closed circle, with three institutions holding around half of all assets. These banks typically focus on low-risk, high-margin sectors such as corporate lending, mortgage portfolios and credit loans to salaried workers.
By comparison, SMEs are viewed as high-risk and high effort, with many large banks lacking the flexibility and cost-effective channels needed to reach small borrowers and offer customised products.
As a result, SMEs are routinely shut out when it comes to credit. Moreover, in the instance they can access credit, it comes with strings attached. SMEs often cite high fees, unfeasible requirements and overly complex reporting processes as the primary reasons limiting their access to sustainable financing.
Many SMEs are also excluded from the banking system due to their determination to build businesses from the ground up. Unwilling to take on high risks, banks deny prospective SME clients on account of them being too young or having a limited credit history.
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By GlobalDataThis forms a feedback loop. Unable to access the credit they need to expand, innovate and compete, SMEs are left unable to grow, stuck in a perpetual catch-22 where they cannot earn the credit histories needed to access financing.
Liquidity also remains a significant challenge. The retail system in Mexico has made strides forward in digitisation, with total card payments exceeding $103bn in 2023 and the advancing card sales sector now worth over MXN400bn. However, traditional banking and the financial products on offer remain firmly rooted in the past. A lack of cash advances on digital payments, which provide vital liquidity, is one of the biggest barriers to SME growth.
The Mexican government is not ignorant of the challenges faced by SMEs. In May 2025, President Claudia Sheinbaum signed an agreement with the Mexican Banking Association to boost credit access for SMEs, citing this as a foundational step in stimulating economic growth in the country.
As part of this agreement, the federal government and commercial banks have committed to increasing credit available for SMEs by 3.5% annually over the next five years, with Sheinbaum’s end goal being that 30% of all Mexican SMEs will have access to financing by the time she leaves office in 2030.
This is an honourable goal, but to make it happen, Mexico needs responsible and digitally-enabled solutions to reach SMEs and increase their contribution to the economy and society.
A Mexican solution to a Mexican problem
With the political will in place, what Mexico needs is bold, innovative players to step up and deliver smart credit and loan solutions for SMEs. This isn’t just about financing, it’s about fuelling a dynamic economy, strengthening deposit pipelines, and laying the groundwork for long-term stability.
While international players may eye up Mexico seeking to capitalise on opportunities in Latin America’s second-largest market after Brazil, they are primarily focused on providing consumer credit, not providing financing to Mexico’s rich ecosystem of artisanal and local businesses.
This is a challenge that demands a homegrown response, one that is rooted in a deep understanding of the Mexican economy and society. SME credit and advances are best provided by institutions who understand these businesses and the opportunity they present. This is how to drive growth without creating a pipeline of unsustainable debt.
Digitisation in the driver’s seat
However, simply handing out loans is not enough. What these Mexican SMEs need is a full ecosystem of treasury management solutions, customer support and flexible credit options that work together to drive real business growth.
For this to occur, digitisation is essential. Many Mexican business owners cannot access financing, but the majority do own a mobile phone. This is the game-changer. The future of SME finance now lies in leveraging Mexico’s digital readiness and building accessible, integrated platforms that turn smartphones into financial lifelines.
As with many things, the solution to addressing unbanked SMEs lies within advanced technology. Using smart algorithms for credit scoring enables lenders to assess credit worthiness using alternative data sources, such as utility payments and transaction records, rather than relying on credit histories that previously unbanked SMEs may lack.
The algorithms can also generate faster and more inclusive decisions, reducing default rates by more accurately predicating risk and removing the bias that can creep into traditional rule-based methods of assessment.
A new frontier for SMEs, and Mexico
If Mexico wants inclusive, sustainable economic growth, its financial system must evolve to support the engine of its economy: SMEs. For too long, a concentrated banking sector has ignored the needs of these businesses, leaving them underfunded and overburdened.
The solution is a system that works from the ground up, powered by technology and homegrown institutions that understand how the country truly operates.
This goes beyond the practicalities of just offering loans. It means harnessing digital transformation and expanding the credit options open to SMEs. By shifting the narrative from viewing SMEs as risks to be avoided to recognising them as foundations to build upon, Mexico has a real, viable blueprint for resilience, innovation, and inclusive growth.
Carlos Marmolejo is CEO of Finsus
