use data for 2000-II to 2004-IV (19 quarters in total). After 2004-IV, the ENE was changed to a new survey<sup>11</sup> .

We chose to use the ENE data in our analysis for the following reasons. First, it includes detailed questions about a person's economic activity (including self-employment), and it also reports a person’s income from their main occupation. Second, it captures and distinguishes between formal and informal self-employment and firms, making it possible to investigate the effect of Banco Azteca on informal firms. This is important since anecdotal reports mentioned in the Appendix suggest that many Banco Azteca clients are informal business owners. Third, the ENE covers a wide range of municipalities for 10 quarters before Banco Azteca opened and 9 quarters after, allowing us to implement the identification strategy described above<sup>12</sup> . Forth, the panel structure of the ENE allows us to describe the effect of Banco Azteca more precisely by looking at the impact on different pre-reform occupation groups.

The ENE covers a total of 1,222 municipalities, but we drop the ones that do not have any bank since we feel that they would be less comparable to the municipalities with Azteca. We determine which municipalities had a bank branch in the fourth quarter of 2002 and which had an Azteca branch by referring to data from the Mexican bank supervisory body, the Comisión Nacional Bancaria y de Valores (CNBV). Our final sample includes 576 municipalities, of which 249 had an Azteca branch in fourth quarter of 2002, and 327 did not have an Azteca branch, but had a branch of a different bank. Almost all the municipalities where Azteca opened also had a branch of a different bank. Only 6 out of the 249 Azteca municipalities in our data did not also have a different bank branch.<sup>13</sup> Figure 3 shows a map

> 11 There are two reasons why we do not use data from the new survey. First, the question that distinguishes informal from formal business owners is different in the new survey, implying that one of our main outcome variables is not conistent across the two surveys. Second, Banco Azteca started opening new branches after initially establishing branches in all pre-exisiting Elektra store. This means that our identification strategy is less valid for later years.,

> 12 It is important to point out that the way the ENE sample is constructed implies that a municipality-year average is not necessarily representative of the municipality in that year. The sample selection procedure randomly selects households at a small geographic unit, the AGEB (Basic Geo-Statistical Area). All AGEBs within a state are first stratified by socioeconomic characteristics. Within each stratum, a certain number of AGEBs is chosen at random. Then, households are chosen at random within the AGEB. This procedure implies that it could happen that only some socioeconomic groups get selected in a given municipality in a given year. However, since the strata are randomly chosen, this remains in expectation a random sample of the households in a municipality, so that the estimate should remain unbiased.

13 There are a total of 2,451 municipalities in Mexico, but the ENE does not cover all of them. The ENE is representative for cities, but only includes a random sample of rural municipalities. A total of 696 municipalities 9