INDUSTRY REPORT: BANKING
PERU FINANCIAL INCLUSION ON THE RISE
Banco de Credito del Peru brings a floating bank to small towns along the Amazonas.
As Peru’s economy speeds ahead, one statistic stands out like a black eye. The country’s banking inclusion rate is among the lowest in South America. But with banks making concerted efforts to reach the far-flung and less fortunate— high in the Andes and tucked along the Amazon River— inclusion is on the rise. The government of President Ollanta Humala, meanwhile, says it’s mulling new strategies to aggressively court millions of people who still don’t bank. The Ministry of Development and Social Inclusion, in charge of developing the strategies, aims to deepen financial education and promote savings programs among Peru’s poorest residents, while improving their access to banking infrastructure, said Gabriel Arrisueno, the ministry official leading the initiative. The ministry intends to launch the program officially later this year, but it has already made progress. Rural residents in the government’s cash-transfer program Juntos, for example, are now receiving payments through new savings accounts at the state-owned Banco de la Nacion. The bank has also installed Quechua-language ATMs in Andean villages where Spanish is rarely used. “Financial inclusion is one component of increasing social inclusion and market participation,” said Arrisueño. Peru’s banking sector has seen rapid growth over the last decade, a trend that’s likely to continue as banks increase their presence in poor, isolated regions that have traditionally lacked financial services. The Banco de la Nacion is a prime example. Its growth strategy for the next three years aims to provide banking to 1.5 million new customers in the Amazon jungle and Andean highlands. This plan alone would boost the number of people in Peru’s banking system by 20 percent. Low income residents in remote communities have traditionally lacked access to formal banking in Peru, along with other services. At
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LATIN TRADE SEPTEMBER-OCTOBER 2012
Analysts say banking agencies are the key to most of the success in reaching low income areas. The number of agencies has skyrocketed in recent years, from about 4,300 in December 2008 to almost 11,200 in June 2012, and many are located in Peru’s poorest areas. the end of 2011, banking sector loans represented just 26 percent of the country’s gross domestic product, compared to 74 percent for Chile and 49 percent for Brazil, according to Peru’s private-sector banking association, or Asbanc. Yet in recent years, Peru has boasted one of Latin America’s fastest growing economies, posting expansion of 6.9 percent in 2011 and 8.8 percent in 2010, thanks to strong domestic demand and private sector investments. The country’s poverty rate has also declined sharply, meaning an emergent middle class is reaching for more and more consumer goods. The banking sector has tracked this growth. Since 2005, bank loans have expanded by an average of 17 percent per year with consumer loans and mortgages forming the fastest growing segments. Analysts say this is largely due to aggressive expansion plans to increase the number of clients from lower income brackets.
PHOTO: BANCO DE CREDITO DEL PERU
BY RYAN DUBE