Financial Inclusion and its Determinants: The Case of Argentina

This paper analyzes the three dimensions determining financial inclusion in the case of Argentina, from a microeconomic perspective. These dimensions are: access, use, and barriers. On the supply side, it assesses the access of formal financial services through traditional channels: branches and ATMs, with an as-yet incipient regulation for financial inclusion. The study suggests that in terms of use, a person’s level of education, income, and age are important variables which determine whether they have financial products such as accounts, credit and debit cards, formal credit, and electronic payments. It also identifies factors affecting the perception of different barriers of involuntary exclusion and covers the following sections in detail:

• Characteristics of the formal financial system in Argentina with a focus on the size of the formal financial sector, channels for accessing the formal financial system, and regulatory framework for financial inclusion;
• Data and methodology used for the study with a focus on the Global Findex data base and a discussion on the probit models used for the analysis;
• Empirical results with a focus on the use of financial products and perceived barriers to financial inclusion;
• Discussion on the findings and concluding remarks.