Measuring and Monitoring Financial Inclusion in Peru
November 29, 2011
Financial inclusion is at the forefront of many policymakers’ agendas, both at the national level and through standard-setting bodies such as the G20. There also is a growing list of countries that have specific financial inclusion policy mandates that reach across different government ministries and agencies.
Peru has been one of the leading countries in Latin America for prioritizing financial inclusion and, more importantly, putting these policies to action through new programs and policy reforms. This has included the expansion of branchless banking (primarily through third-party agents), financial education courses administered through the national school system, improved financial consumer protection for low-income populations, and new delivery channels. With several financial-inclusion efforts underway, the Superintendency of Banking, Insurance Companies and AFPs (SBS) is now focusing on the development of new data, indicators, and analytical tools to monitor the changing financial inclusion landscape in Peru, and how to effectively use this data to change policies and target underserved sectors or communities.
In a new publication co-authored with CGAP, Financial Inclusion Indicators for Developing Countries: The Peruvian Case, the SBS details its own experience as an indication of how policymakers can use financial inclusion indicators to measure progress in financial access, and develop second-level measurements to track specific topics such as intra-country distribution of financial services and the correlation between financial access and social and economic development .
This study comes at an important moment for financial inclusion in Peru. The past decade has seen strong economic expansion—an average annual growth of 7.2%—that has correlated with higher levels of financial intermediation, due to an increasing volume of loans and deposits of the financial system. In the past five years in Peru, the ratio of loans to GPD rose from 17.64% to 27.03%, while the ratio of deposits to GDP increased from 22.55% to 30.25%. Although these indicators have improved significantly, the size of the Peruvian financial system is still low compared to international standards, and access is not evenly disbursed across all regions of the country and socio-economic levels. For example, between December 2005 and December 2010, the percentage of loans granted by the financial system to customers in the poorest quintiles (quintiles 1, 2, and 3) increased from 5.9% to 11.8%, while the percentage of deposits increased from 5.1% to 7.8% over the same period. However, the loans and deposits of the financial system continue to be concentrated in the less poorer sectors (76.4% of loans and 84.4% of deposits).
Having access to this level of data on financial inclusion is an important goal for policymakers in any nation, and one that CGAP has helped promote in the past through research such as the Financial Access 2010 report. In this publication the SBS uses CGAP’s global data to evaluate Peru’s performance in comparison with several similar markets, adding a global perspective to the national-level analysis gained from the SBS’ financial inclusion data. In addition to CGAP’s work on financial access indicators, new tools for global financial inclusion measurement also are being championed by the Alliance for Financial Inclusion’s “Financial Inclusion Data Working Group,” and the G20’s Global Partnership for Financial Inclusion’s “Sub-Group on Data and Measurement.” In the end though, this global push for financial inclusion data will require strong country-level capacity to analyze what the numbers tell us about financial access, and where policymakers should focus their attention to address existing gaps nationally. In Peru the SBS is taking strong steps to accomplish this goal of better financial inclusion data and policymaking, and offers an important case for other countries to learn from.
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