There is sustained growth in banking in Latin America, according to new reports from the World Bank; this due to the penetration of credit and debit cards, and bank accounts.
“These products allow us to build a risk profile in power plants. “Through the credit card, which is essential for them to lend us cheap money, we can acquire housing or have access to education,” said Jairo Uribe, CEO of Financial Planning, explaining why these aspects are relevant to analyze banking and financial inclusion.
The Global Findex indicates the percentage of people over 15 years of age who own these products in different territories of Latin AmericaIn terms of credit or debit cards, the leading countries are Chile, Venezuela and Brazil with more than 70% of their population using these products.
While Colombia appears after the first 10 places. “At the end of 2023, the highest concentration of credit cards is between 29 to 45 years of age. “Those under 29 are not having access, not only because they do not make requests but because the financial system does not present products for the needs of this segment,” said David Bocanument, president of the Guarantee Fund, FGA, about how that 30% of the country is made up.
In the spectrum of savings account owners, Chile, Venezuela and Brazil also lead with more than 80% of their population with this product. Colombia is in tenth place with 56.2% of the population banked through accounts.
With these data, it can be said that both at the regional level and among the countries of the Pacific Alliance, Chile is the undisputed leader in banking use, while Colombia, Mexico and Peru are halfway there. These last two have 30% and 40% of the population banked with cards, and 57.5% of Peruvians have savings accounts, while in Mexico these reach 46% of the population.
That Chile stands out before the others may not be surprising while a case that does draw attention is that of Venezuela, but Theodore Kahn, director of Control Risks for the Andean region, explains that this opening of bank accounts and acquisition of cards by a large part of the population It is not a positive indicator, but rather means a mechanism used to cope with the complicated economic situation.
“With hyperflation, the local currency, especially in cash, becomes completely useless, since it is not so practical to have cash, the use of debit and credit cards is encouraged,” explained Kahn, and also points out other factors that influence these figures.
On the one hand, the great flow of migration of Venezuelans abroad, who contribute to sustaining the local economy through remittances, which require that the person receiving these money flows have access to a bank account.
“Another factor that explains the high rate of banking access is the government strategies of giving subsidies, bonuses through cards or accounts that people have to open in order to receive these benefits, which also allow them to survive in the face of such a dramatic economic situation. ”Kahn concluded.
Costa Rica leads in Central America
The Central American countries are also part of the analysis, they are among the last places in banking, with the exception of Costa Rica, which registers more than 53% of the population with cards and 68.5% with accounts.
While less than 30% of the population of Guatemala, El Salvador, Honduras and Nicaragua have cards, Panama and the Dominican Republic slightly exceed that range, and in the case of accounts, these two countries have between 45% and 50% of penetration, the aforementioned are below 40%.
