Digitization for financial inclusion: expanding outreach to those who need it the most

Committed to the sustainable development of people living invulnerable conditions and who have greatly suffered from the pandemic’s consequences in Latin America, the BBVA Microfinance Foundation, through its institutions in Colombia and Peru, provided access to financial services to more than 296,600 low-income persons in 2020. By channeling public aid and microcredits, they are assisting in the recovery of the most vulnerable from the repercussions brought by the health crisis. 

In Colombia, BBVAMF’s entity, Bancamía, worked side by side with the public sector to deliver the Ingreso Solidario and Bogotá Solidaria en Casa subsidies to nearly 270,000 people who, until then, didn’t have access to any kind of public aid. Among them, 69% are women, 20% live in rural areas and 44% possess primary education at best.

To achieve this, Bancamía made various client service channels available such as mobile banking or a virtual office accessible through its web page. Harnessing technology has been critical in opening bank accounts in situ, making the process speedier. In many cases, digitization has also allowed for geolocalization of beneficiaries, especially those who couldn’t leave their homes because of their age, health conditions or places of residency. Thanks to the efforts of the microfinance officers and despite the mobility restrictions, they were able to reach areas where other banks do not go, with the aim to distribute public aid to its beneficiaries.

In the case of Sergio Pacheco and Victor Madera, two of Bancamía’s microfinance officers, they had to travel 45 minutes by motorbike, cross the Magdalena River in a 30-minute boat ride and walk  an additional 15 minutes to get to a remote town where more than 40 people were waiting to open a savings account to receive the government’s subsidy.

Similarly in Peru, through its MFI, Financiera Confianza, BBVAMF also implemented the same process, made easier by digitization. More than 26,800 people accessed formal financing whether it be through the Bono Familiar Universal public subsidy, or through a loan that would help them reactivate their small businesses.

“This crisis has put the microfinance sector to test, but also proven how valuable it is. Namely, our efforts to expand financial inclusion in Colombia and Peru so that hundreds of thousands of people in vulnerable conditions could access public aid and emergency credit funds to reactivate their small businesses during these tough times”, shared BBVAMF CEO, Javier M. Flores.

BBVA Microfinance Foundation, through its institutions, drives the financial inclusion of nearly 300,000 people in Colombia and Peru.

In both countries, BBVAMF serves 2.1 million people which represents 80% of the 2.6 entrepreneurs that it serves in five countries where it is present (aside from Colombia and Peru, the Foundation is also in Dominican Republic, Chile and Panama).

According to the World Bank, Latin America is the region most affected by the pandemic, with greater impact on the poor and vulnerable population, threatening to push millions of people more into poverty. In 2021, both digitization and the close relationship between clients and microfinance officers like Sergio Pachecho and Victor Madera, will continue to be essential to make way for inclusion and to help improve the lives of thousands of people who are at risk of exclusion.