Mexico has a huge number of informal businesses. Recent data from 2024 and 2025 show that many Mexican businesses are not registered with the Tax Administration Service (SAT), lack a legal structure, and do not pay taxes. Business-focused studies report even higher informality than the national rate of 55%. Reports from early 2025 say that about 75% of micro-enterprises in Mexico, which account for 94.3% of all MSMEs, operate informally. In the second quarter of 2025, the national labor informality rate was 54.8%. This figure includes workers without social security, even if they work for formal companies.
Contribution to GDP: Although they represent a significant portion of the economy, even though there are many informal businesses, this sector contributes about 25% of Mexico’s GDP, with small, family-run, or subsistence businesses (micro-enterprises) that find the cost of compliance, taxes, and formalization to be a burden.
Government Informality Combat Plans
The Mexican government is working to reduce informal business structures—which account for over 50% of employment—primarily by simplifying tax compliance, digitizing registration processes, and offering incentives for small businesses to join the formal economy. Key strategies include the RESICO tax regime (1%–2.5% income tax rate), simplified digital tools like “Mis Cuentas”, and efforts to link formalization with social security benefits.
Key Initiatives to Combat Informality
Tax Reform (RESICO): Introduced in 2022, the Simplified Trust Regime (RESICO) replaced the RIF to encourage small taxpayers (under 35 million pesos in revenue) to register, offering tax rates between 1% and 2.5%, which has significantly increased formal tax filings.
Digitalization and Simplification: The government uses digital platforms to make business registration and tax compliance easier, such as the “My Accounts” (Mis Cuentas) tool and simplified invoicing, reducing administrative burdens.
Social Security Incentives: Efforts are being made to align formalization with access to better public services and social security, as seen in recent debates on labor reforms, to make formality more appealing than the informal, non-benefited, low-income sector.
Structural Adjustments: Policies have aimed to ease regulations, and promote foreign investment, encouraging the transition of SMEs into the formal sector.
Despite these measures, in early 2024, labor informality remained high, with nearly 54.5% of workers lacking social security and contracts, indicating a continued, long-term challenge to transition the large informal economy.
Accountability and Responsibility
What is needed first, is to invoke a sense of accountability and responsibility into the overall culture. Both have been, for the most part, non-existent in Mexico since at least the conquest by the Spanish in 1519. There was an excellent opportunity to restore accountability and responsibility after the revolution that returned power, but after 300 years of Spanish control, from the fall of Tenochtitlan on August 13, 1521, to the official achievement of Mexican independence on September 27, 1821, it was no longer on the minds of Mexicans.
Accountability is the ultimate ownership of the results and consequences—good or bad—occurring after a task is finished, usually resting with one individual. Responsibility refers to the duty to complete assigned tasks or actions, often shared among team members during a process.
Without a thorough understanding and adherence to accountability and responsibility of the government, both. federal, state and the municipalities, as well as the individual business owners and general public, change will be impossible.
Key differences include responsibility being delegated/shared, while accountability is personal and cannot be passed on.
Definition: Accountability is the obligation to answer for the final outcome. Responsibility is the obligation to perform a duty or task.
Ownership: Accountability is results-focused (“owning the result”). Responsibility is task-focused (“doing the work”).
Delegation: Accountability cannot be delegated; the ultimate owner remains accountable even if they assign tasks. Responsibility can be delegated to others.
Timing: Accountability usually takes place after the event or project is complete. Responsibility is ongoing during the execution of a project.
Scope: Accountability is typically held by one person. Responsibility can be shared among a team.
In summary, accountability is about “who answers for it” while responsibility is about “who is doing it‘”
Microfinance
Mexico could consider microfinance to help small businesses grow. The idea of microfinance was developed in the 1970s by Muhammad Yunus, a Bangladeshi economist, entrepreneur, and academic. Since 2024, he has served as the fifth chief adviser of Bangladesh. Yunus introduced the modern concept of microcredit and microfinance, earning the Nobel Peace Prize in 2006 and more than 15 other global awards.
In the 1970s, Yunus observed how poor villagers in Bangladesh lacked access to fair credit, prompting him to lend small amounts to help them start businesses. This idea gave rise to microcredit and later the Grameen Bank.
In December 1976, Yunus obtained a loan from the government-owned Janata Bank, which enabled him to make more loans to poor people in Jobra. The project grew as Yunus worked with other banks to get more funding for similar efforts in nearby villages. By 1982, the program had 28,000 members, showing a strong need for accessible financial services. On October 1, 1983, the project became an independent bank called Grameen Bank, or ‘Village Bank.’ The bank focused on lending to women and serving rural communities that mainstream banks often ignored. By July 2007, Grameen had given about US$6.38 billion in loans to 7.4 million borrowers, most of whom were women.
To ensure high repayment rates and foster trust, Grameen Bank pioneered the use of ‘solidarity groups.’ These small, informal groups—typically consisting of five members—apply for loans collectively. Each member acts as a co-guarantor for the others, and the group as a whole is responsible for ensuring that all members repay their loans. Before qualifying for a loan, all group members must complete a training program covering financial literacy, group governance, and loan protocols. The mechanism of collective responsibility creates social pressure and mutual accountability, dramatically reducing default rates. Additionally, the solidarity group system encourages peer support, personal development, and a sense of community among borrowers, which has proven essential in promoting economic self-advancement.
In the late 1980s, Grameen Bank began expanding its work to address more rural development issues, such as better use of fishing ponds and improved irrigation with deep tube wells. Seeing the potential to help local economies and improve lives, Grameen set up special projects for these areas. In 1989, these projects became separate organizations: the fisheries project became Grameen Motsho (“Grameen Fisheries Foundation”), which focused on sustainable fish farming and community-run fisheries. The irrigation project became Grameen Krishi (“Grameen Agriculture Foundation”), which worked to promote efficient water use, crop diversity, and modern farming among small farmers.
Over time, the Grameen initiative expanded into a multi-faceted group encompassing both profitable and non-profit ventures. Major projects included Grameen Trust, which supports the replication of the Grameen microcredit model globally, and Grameen Fund, which invests in equity projects such as Grameen Software Limited (IT solutions), Grameen CyberNet Limited (internet services), and Grameen Knitwear Limited (garment manufacturing). Grameen Telecom emerged as a key player in the telecommunications sector, acquiring a stake in Grameenphone (GP), now the largest private phone company in Bangladesh. Launched in March 1997, the GP Village Phone (Polli Phone) project brought affordable mobile phone services to rural communities, empowering more than 260,000 rural poor across over 50,000 villages by 2007. This initiative enabled women entrepreneurs, known as “phone ladies,” to earn income by providing phone services to their neighbors, further advancing social and economic inclusion.
Grameen’s expansion had a big impact on rural Bangladesh. The Grameen Motsho project boosted fish production, introduced improved fish-farming methods, trained local fishermen, and established community-run fish ponds. This led to more food security, higher incomes, and new jobs. Grameen Krishi also helped by improving farming with better irrigation, crop rotation, and access to good seeds and fertilizers. These changes made water use more efficient and helped small farmers use sustainable methods, increasing their harvests and making them less vulnerable to droughts and floods. Besides creating jobs, these projects improved lives, helped communities become more self-reliant, and made them stronger against economic and environmental challenges.
Yunus was inspired to start Grameen Bank after seeing famine and deep poverty in Bangladesh in the early 1970s. He was troubled by how academic theories did not match the real struggles of the rural poor. Yunus wanted to make economics useful by creating solutions that helped people become self-reliant. He imagined a financial system that gave everyone, especially the most disadvantaged, a fair chance. By using sustainable, market-based methods instead of one-time charity, he hoped to tackle the root causes of poverty and create lasting change.
The success of the Grameen microfinance model inspired similar initiatives in about 100 developing countries, including several in Latin America. In Mexico, interest in microcredit programs has grown as policymakers and practitioners recognize their potential to empower women and support poorer communities. Many microcredit organizations in Mexico have retained Grameen’s focus on lending to women, given their crucial role in family and community well-being. More than 94% of Grameen loans have been extended to women. This emphasis has led to improvements in women’s economic and social status in various contexts, granting them greater control over household finances and enhancing decision-making power at home and in their communities. Access to microcredit has enabled women in Mexico and elsewhere to start or expand small businesses, improve health and sanitation, and support their children’s education. These effects have contributed to breaking cycles of poverty, reducing gender inequality, and fostering societal change, such as increased women’s participation in local governance.
For his work with Grameen Bank, Yunus was named an Ashoka: Innovators for the Public Global Academy Member in 2001. Author Rashidul Bari says the Grameen social business model has evolved from a theory into a practical, inspiring approach used by top universities, entrepreneurs, social businesses, and companies around the world. Its success has led to more academic research, policy discussions, and new social enterprise projects.
The Yunus Centre in Dhaka, Bangladesh, is a think tank focused on social business, fighting poverty, and sustainability. Founded in 2008 and led by Dr. Yunus, the Centre promotes its social business ideas and supports related projects. Its work includes poverty campaigns, research, publications, and help for social business start-ups. The Centre also runs the Global Social Business Summit and creates academic programs with international universities.
