Financial Inclusion for the Rural Poor Using Agent Networks in Peru

Increasingly, government-to-person cash transfer programs are providing beneficiaries with formal savings accounts through which they disburse cash transfers. In Peru, evidence from one such program suggests that very few beneficiaries of a conditional cash transfer (CCT) use their accounts to save, preferring instead to withdraw the entire cash transfer immediately after it is made. Beneficiaries may prefer to withdraw their funds all at once due to the time and cost required to travel to a bank branch or automated teller machine (ATM) to access their account, especially in rural areas where there is limited banking infrastructure. Furthermore, although access is improved and travel time reduced, beneficiaries may not have the necessary knowledge or confidence when interacting with the formal financial system.

This evaluation explores how the introduction of branchless banking and a workshop to build knowledge and trust of the formal financial system impacts beneficiaries’ attitudes toward this same system and savings behavior. The paper identifies three hypotheses to explain why users of the Peruvian CCT program JUNTOS do not actively use the accounts provided with their transfer, and proposes solutions for each of the obstacles.