SOME mountainous parts of Mexico are so remote that the electricity grid fails to reach them, let alone the banking system. A five-year-old social enterprise, Iluméxico, hopes to change that. It provides more than 20,000 people with loans to buy low-cost solar panels and batteries, enabling them to switch lights on, watch television and charge mobile phones, sometimes for the first time.

It also introduces them to the financial system via those same mobile phones. It has launched a pilot project enabling them to pay off the loans in instalments via an SMS-based payment system, Transfer, owned by Banamex, one of Mexico’s biggest banks. Most have no credit history, so Iluméxico takes a big risk in lending to them. Manuel Wiechers, its boss, says they are often late with their payments because rural incomes are unstable. But they are keen to maintain access to credit, so their ultimate default rates (currently 5.8%) are only slightly above the national average.

Until recently such people had little hope of getting credit other than from loan sharks or pyramid schemes. Mexican high-street banks have signally failed to provide services to the rural poor: the country has fewer branches per 10,000 people than neighbouring Guatemala, which has a much lower GDP per person. Less than 7% of the 4m microbusinesses that make up 95% of all firms in Mexico had access to bank credit in 2013.

So Mexican authorities are hoping that technology can help Mexico to “leapfrog into modernity”, in the words of Agustín Carstens, governor of the central bank. Mobile banking offers a simple way to expand services to the unbanked. The bigger challenge is credit, which is where “fintech” firms such as crowdfunding platforms see an opportunity.

On June 19th the National Banking and Securities Commission (CNBV), which regulates the industry, gave its first licence to a peer-to-peer (P2P) lender, Kubo.Financiero, which aims to provide loans to microbusinesses such as mom-and-pop grocery stores, funded by anyone with spare cash to lend. The CNBV is creating a regulatory framework that will enable more crowdfunding platforms to become regulated bodies. It has also been trying to encourage more mundane efforts to reach the unbanked, through mobile banking.

This has come after much foot-dragging. Mexico has been relatively slow to embrace new financial technology in general and mobile banking in particular, because of fears about money-laundering and the power of Carlos Slim, Mexico’s richest man, to use his dominance in the mobile-phone market to stifle competition. Yet the mood has changed. “If anybody has any ideas about how to bring technology into financial transactions, our doors are open,” Mr Carstens says.

Vicente Fenoll, who founded Kubo after 18 years in microfinance, says that despite its officially sanctioned status it is still keen to be a disruptive force. Banks that lend to Mexico’s tiniest firms often do so at extravagant interest rates (90% a year is not unheard-of). He claims that a digital platform and better credit-screening algorithms will enable him to charge half those rates. “We are the Uber of [Mexico’s] financial sector,” he says. That is a whopping claim. Currently Kubo has only 47m pesos ($3m) of loans outstanding, compared with total bank credit of 2.8 trillion pesos.

Even a more conventional technology, the banks’ mobile-phone platforms, has a long way to go. Banamex officials say Transfer, which is three years old, has 2.7m users—less than 3% of all the mobile phones in Mexico. Carlos Orta of the CNBV says these new technology platforms are “more of a complement than a substitute” to offline banking.

Unsurprisingly, the banks accept little blame for the low credit penetration. Alberto Gómez of Banamex, which is owned by Citigroup, an American bank, says it stems from high levels of informality among small firms, and strict money-laundering and know-your-customer rules. The cost of administering such regulations is more or less the same no matter how big or small the account, making it even harder than usual to profit from customers who do not have much money. He also says there is not a lack of credit supply in Mexico, just one of demand.