Under the Radar
A look at banking accessibility within Mexico's informal economy.
Mexico’s informality rate closed July of this year at 54.5% — a figure 120 basis points lower than the previous year.
Despite efforts to reduce informality in the country, we found that a staggering 762 municipalities in Mexico still had over 90% of their total workforce employed in the informal economy in 2023. Out of these, 183 had a total population of over 10,000 people.
In total, these 762 municipalities are home to close to 6 million people; the majority of them concentrated across the states of Oaxaca, Chiapas and Guerrero.
Interestingly, the number of regions almost fully dependent on the informal economy haven’t changed much over the past seven years. According to INEGI estimates, in 2017 there were 774 municipalities with informality rates surpassing 90%; just 12 more than the current figures.
As of the latest estimates, we found that there isn’t a single municipality in the country with an informality rate below 20%.
Despite most of the population living in regions where the off-the-books economy hovers close to the national average of 50%, close to 23% of the population resides in areas where the informality rate exceeds 70%.
How does this relate to banking accessibility and financial inclusion?
According to Banxico data, remittance inflows per capita were 43% higher for municipalities with +70% informality rates than the national average. This translated into an impressive total share of remittance inflows of over 35% for these areas, despite them only covering 23% of the country’s total population.