Mexico: More Than Half of the Households Don’t have a Bank Account

December 12, 2012

Photo Copyright: Banco del Ahorro Nacional y Servicios Financieros (Bansefi)

  • More than half of Mexican households don’t save money in financial institutions. In rural areas, only 6 out of 100 have access to financial services.
  • The National Bank for Savings and Financial Services (Bansefi), implemented various initiatives to improve the situation.
  • 700,000 people in rural areas have now a bank account and access to other financial services, thanks to projects supported by the World Bank.

When you live far away from the cities, roads are unpaved and electricity scarce, access to a financial institution might not seem the main priority.

But think about it: having access to a safe way to save your money or to decent credits, could mean the difference between life and death if something serious comes up. In Mexico, financial services are crucial to send and receive remittances safely, or could help boost local commerce and living standards.

That’s how Jaime Marín Hernández sees it. The farmer who plants and sells lime trees says that saving money is important for him. “I have about 5000 pesos of savings now. For me, the more I save, the better,” he explains.

Marco Polo Tapia Juárez, a school boy, already saves money for school material or toys and thinks that it is safer to have it in the “caja de ahorros”, the rural financial institution, than in his house. “If my father gets ill, or something like that, I know we can take out money, in case of any emergency,” he explains.

Millions of Mexicans without a bank account

But about more than half of Mexican households still don’t have access to financial services, and in rural areas the access rate is only an extremely low 6%.

The World Bank has analyzed that among the factors for this lack of financial service use are insufficient knowledge of financial products and benefits, as well as an inadequate access network, especially in rural areas.

The rural poor are not seen as a potential market for commercial banking services because of their marginalized condition, geographically disparate locations, and lack of knowledge of this market.

" If my father gets ill, or something like that, I know we can take out money, in case of any emergency "

Marco Polo Tapia Juárez

School boy

By tailoring products to the needs of the demand, and by subsidizing financial institutions to encourage them to provide better services to the rural poor, the Bank for National Savings and Financial Services (BANSEFI), has promoted financial inclusion through projects and advisory services.

Bansefi has for example implemented information “caravans”, trucks that go through the Mexican countryside and stop in small towns and rural communities to explain to people how they can access and benefit from “L@ Red de la Gente” (The People´s Network).

“L@ Red” is an alliance between Bansefi and more than 280 savings and credit entities that offers services like micro-insurance or account-to-account transfers for remittances from Mexicans in the United States.

Another initiative, a technical assistance program for rural microfinance supported by the World Bank, aims at strengthening rural financial institutions and reaching out to those in the most remote locations.

Some institutions do that by sending someone with a motorcycle to rural communities, so that people can cash in or take out their money. That person uses portable technology like card readers, tablets and mobile phones.

700,000 people already gained access to financial services

Thanks to previous projects supported by the World Bank, 700,000 people in rural or marginal areas have already opened bank accounts and gained access to other financial services, with 50% of them being women.

But because this is not enough, the World Bank is continuing to support this area, with technical assistance to Bansefi, by financing activities through loans and by bringing together other financial institutions as well as government agencies.This is part of the World Bank’s overall engagement and tailored services for efficient financial services in Mexico.

The goal of the current project is to increase membership in formal rural financial institutions by 800,000  new clients, of which at least 60% should be from rural areas.