Mexico’s financial technology (fintech) industry is growing at its fastest pace ever, with as many as 125 new startups joining the industry in the past 12 months alone.

The Mexican ecosystem is currently 2.5 times larger than Colombia — the third fintech ecosystem in the region with 124 startups — over 3 times larger than Argentina, and over 4 times larger than Chile, according to a recent study by startup accelerator Finnovista.

Lack of access to banks and an increasing number of smartphones have been the key drivers of the fintech boom in Mexico, with the newly-introduced fintech law opening the door for a wide range of fintech solutions.

From micro-loans and peer-to-peer lending services to remittance companies and online-only banking alternatives, the space is growing faster than regulators could have ever imagined.

Among the major players are smartphone banking service Albo, mobile phone credit card reader provider Clip, peer-to-peer lender Kubo Financiero, and micro-lender Kueski.

Mexico City is home to 61% of the country’s startups, followed by Guadalajara at 9%, Monterrey with 6%, Merida with 4% and Puebla with 2%. In the survey, 83% of companies claimed to be operating only in Mexico, while 17% confirmed operations beyond national borders.

Around 38% of Mexican fintech startups have expanded beyond the region, mostly within Latin America and the Caribbean. Around 11% of them have operations in Europe and 8% in Asia.

However, Mexican fintech startups are still raising small amounts of external funding, as 40% said to have received less than US$100,000, while only 7% claimed to have raised over US$1 million.

“However, in the last few years we have seen important investment rounds in Mexican financial technology startups, such as the US$89 million round raised by the lending platform Konfio, led by Vostok Emerging Finance; the US$7 million raised by Curu, led by QED Investors; or the US$6 million raised by ePesos, led by Santander Innoventures,” says Finnovista.