Access to financial services is a key element for rising out of poverty, and technology is heralding a range of new models that provide a variety of services and products that can be adapted to the needs of each population sector.
The World Bank estimates that around two billion adults have no access to banking services –in other words, 38% of the world’s population. In Latin America this affects 210 million people. The BBVA Microfinance Foundation (BBVAMF) –distinguished by the United Nations– operates in several Latin American countries to bring Responsible Productive Finance to vulnerable individuals by offering them a model of personalized service and advising them throughout the whole process. 83% of its customers are poor or vulnerable, and 61% are women.
Since its creation in 2007, the BBVAMF has granted loans worth over 7.2 billion dollars to almost 5 million entrepreneurs. 32.5% of the entrepreneurs supported by the BBVAMF escape poverty two years after joining, and after three years their sales increase by 57%.
Another highlight is BBVA’s agreement with the Alliance for Financial Inclusion (AFI) to promote projects to help SMEs and low-income individuals gain access to banking services. The result of this agreement is the Open Talent financial inclusion award, which last year went to the Chilean startup Destacame.cl.
The startup enables people on low incomes to gain access to credit. All they have to do is register –free of charge and using a simple procedure– and provide information on what they spend on water, light, gas and telephone services. Once this registered, the Destacame.cl platform checks this data to decide whether the user is a responsible payer and a good candidate for receiving a microcredit.
The World Bank also notes that women are 20% less likely than men to have a bank account and 17 % less likely to have received a loan from a formal financial institution. This situation is being tackled by the Fundación África Directo (Africa Direct Foundation – a NGO for development) with its PrestAD project, which allows people from Spain to help directly finance projects by African women.