Gema Sacristán, head of the Financial Markets Division at the IDB's Structured and Corporate Finance Department, highlights some of the experiences in banking penetration that are taking place in several countries in Latin America and the Caribbean. These are initiatives in Chile, Colombia, Mexico, Peru and Brazil to promote and facilitate banking penetration.
Chile, simplified bank accounts
Chile has a robust system of financial inclusion policies covering everything from welfare benefit payments and financial literacy programs through to consumer protection regulations.
BancoEstado has approximately five million customers who use simplified bank accounts that only require an identity card number.
In addition, the welfare system offers an excellent opportunity to extend financial inclusion, as approximately 2.4 million people receive monthly payments by transfer, and 95% of these are in cash.
In March 2014, the government announced the creation of the National Council for Financial Inclusion (CNIF), the body responsible for coordinating the various state institutions associated with inclusion and financial literacy.
The creation of this body means that for the first time Chile has centralized coordination of the design and implementation of all policies and initiatives for establishing bank rates, financial literacy and consumer protection.
Peru: Digital payment platform
With this initiative jointly run by Peru's Superintendency of Banks, Insurance and PFAs (SBS) and the Banking Association (ASBANC), Peru has created the Peru Model. This is a groundbreaking initiative in the area of Latin America and the Caribbean, where the banking sector as a whole, together with other stakeholders, pursues the creation of a single, open and interoperable platform.
Several financial and telecommunications companies and financial consumers interact on this platform, whose goal is to generate a payment ecosystem based on e-money.
The Peru Model aims to achieve the financial inclusion of five million people in the coming five years.
The regulation that made this initiative possible dates from 2012 with the passing of the Law on Electronic Money sponsored by the SBS.
Colombia: Pay easy, pay digital
Colombia is currently implementing an initiative featuring a synergy between different public sector organizations to promote and facilitate banking penetration in the country.
The ministries of Economy and Information Technology and Telecommunications have sponsored a Financial Inclusion Law that includes –among other things– a regulatory framework for electronic transactions, and the creation of bodies specializing in electronic payments. The articles of the law cover aspects relating to rates, and grant the government the power to intervene in them.
According to Sacristán, this initiative was flagged up by the regulations enacted by the country's Communications Regulation Commission designed to limit the rates charged for text messages involving financial transactions via cellphone.
In 2012 this country set up a new regulatory framework for microinsurance, allowing this type of products to be offered through branch offices and banking correspondents.
This regulatory initiative allowed the expansion of access to and use of microinsurance in remote regions of the country, and also in population segments that did not previously subscribe to them.
Mexico, regulations governing microinsurance
Microinsurance, known as “mass insurance”, is a successful tool in these countries. For example in Mexico, 30 companies gave coverage to almost 11 million microinsurance customers in 2011. The regulation governing this type of insurance makes Mexico an example in the region, as it has specific regulations and there are offers from multiple companies.
The financial reform implemented in the last three years focuses explicitly on financial inclusion by increasing the provision of credit, the promotion of a more competitive environment in the banking sector, and improvements in the regulation.
Source: IDB, CMF, Financial inclusion in Latin America and the Caribbean, 2015.