Latin America and Caribbean

The Latin America and the Caribbean region comprises 41 countries that range from small island nations to large economies such as Brazil and Mexico, with a wide diversity in income levels and financial sector development. Many countries in Latin America have enjoyed strong economic growth in the first decade of this century, and performed relatively well during the 2008 financial crisis that slowed down growth in other regions. While this growth has led to a slight reduction in income inequality in Latin America, it and Sub-Saharan Africa remain the regions with the highest income inequalities, as measured by the Gini coefficient, and this income gap is particularly noteworthy in several of the strongest economies in the region, such as Brazil and Chile.

Financial access in Latin America is at similar levels to that in Eastern Europe and Central Asia and the South Asia regions, but lagging behind East Asia and developed economies in most indicators. 39.2% of adults (age 15+) in Latin America has an account at a formal financial institution, with 20.3% of the adult population using these accounts to receive wages, and 10.4% to receive government payments, both of which are seen as potential channels to increase access to financial products and financial inclusion in the region. Nearly 40% of the adult population has saved money in the past year, nearly three-quarters of them doing so at a formal financial institution. Conversely, credit is more commonly taken from family or friends (27.2%) than from a formal financial institution (8.6%). Mobile payments usage rates remain low, at just above 1%.

In the Latin America and Caribbean region, branchless banking continues to be CGAP’s main area of work, with a growing involvement in consumer protection policymaking. CGAP’s branchless banking works is focused on Brazil and Mexico, where CGAP is partnering with banks, government agencies, and technology firms to better understand the financial needs of the growing lower middle-class segment, and develop new products that better serve their financial needs. Part of this work includes better understanding the population through careful segmentation based on livelihoods and financial activity. In addition to work in Brazil and Mexico, CGAP remains active in the branchless banking space in other countries where there is momentum towards new products and services for the base of the pyramid, such as Peru and Colombia. In the area of consumer protection, CGAP is working directly with governments and provider networks to better understand the consumer protection needs of low-income consumers, often through consumer research and field experiments focused. Increased access to financial services has brought with it several consumer protection challenges, such as consumer lending, overindebtedness, and secure use of new channels such as mobile or agent banking. The past decade of growth and stability in Latin America presents many opportunities for financial inclusion, and CGAP will continue to engage with public and private sector actors to help countries take advantage of these opportunities. 


19 December 2017
The 2017 CGAP Cross-Border Funder Survey sheds light on key trends and development in international funding for financial inclusion. It shows that funder commitments to financial inclusion reached a historic high of US$37 billion in 2016.
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English (4 pages)
17 March 2017
It is time for DFIs to adopt an alternative approach to financial inclusion that prioritizes needed market changes. A shift to a market systems approach addresses this need and requires that DFIs carefully analyze each market to determine the key gaps, underlying causes, critical actors, and theory of change for bringing about sustainable market development.
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English (24 pages) | Spanish (28 pages) | French (28 pages)
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