Financial Inclusion in Latin America and the Caribbean: Access, Usage, and Quality

This study presents a general overview of financial inclusion in Latin America and the Caribbean with a focus on three dimensions: access, usage, and quality. It aims to help in identifying weaknesses in financial market development and serves as a basis for elaborating effective inclusion strategies. The paper suggests that despite the steps taken in the region to achieve greater participation of the population in the formal financial sectors, levels of inclusion in all its dimensions continue to be low, although with substantial differences among the economies. It also finds that a considerable amount of the population continues to use the informal financial sector for making their transactions, particularly loans. Other key findings include:

• Most important barriers to financial inclusion in the region are geographical barriers and the high commissions charged on loans and deposits;
• Number of branches of other entities such as MFIs and cooperatives is small, except for some countries where those sectors are well-developed;
• New instruments for financial inclusion, such as banking agents or mobile phone banking, have just started to penetrate the region.