Lessons from Latin America’s drive to enhance financial and digital inclusion

man at laptop holds card in a story about financial inclusion

Financial inclusion is essential for healthy economies and societies. Image: Unsplash/Jason Leung

Ling Hai
President, Asia Pacific, Europe, Middle East & Africa, Mastercard
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  • Worldwide account ownership has reached 76% of the global population, up from 62% in 2014, but 1.4 billion people worldwide remain unbanked.
  • Financial inclusion is vital for healthy economies and societies and is also a key component of meeting the UN Sustainable Development Goals.
  • Here we outline how digital financial products have improved financial inclusion in Latin America and the lessons that can be applied globally.

As we move beyond the COVID-19 pandemic and reach the halfway point of the UN Sustainable Development Goals, there can be no doubt that giving a greater number of people more of an equal opportunity is critical. A vital component of this is enabling expanded digital financial inclusion.

According to the World Bank Global Findex Database 2021, worldwide account ownership has reached 76% of the global population, up from 62% in 2014, which means that despite recent improvements, there are still 1.4 billion unbanked people globally.

Financial inclusion is essential for healthy economies and societies, and once included in the financial system, consumers tend to move along the pathway from inclusion to financial security.

World Bank financial inclusion variables and main gaps. LatAm vs World
World Bank financial inclusion variables and main gaps – Latin American vs world Image: Mastercard

In June, Mastercard released The State of Financial Inclusion post COVID-19 in Latin America and the Caribbean: New Opportunities for the Payments Ecosystem report, conducted in partnership with Americas Market Intelligence (AMI).

Whilst the report demonstrates that the mainstream adoption of digital financial products and services across seven Latin American countries has helped accelerate financial inclusion over recent years, 21% are still excluded and clear challenges remain. These include:

  • Limited access to credit: While 58% of Latin Americans own a credit card, only three out of 10 of them have access to other forms of credit (loans, insurance, or investment products).
  • Uneven distribution of financial inclusion: Only 59% of low-income respondents and 40% of respondents living outside major cities indicated having an account.
  • Lack of financial education: Respondents believe that financial education is key to improve their personal finances, but 68% have never received any training or support on personal finances.

As digitization accelerated over recent years, the use of cash also fell and there is increasing co-existence with digital payments methods. Prior to the pandemic, a quarter of respondents indicated that they used cash for more than three-quarters of their monthly expenses, yet in 2023, this number fell to around 15%.

Alongside this, the impact of smartphones has grown, with penetration reaching 80% across the region. They are now an integral part of the payment process and 88% of respondents indicated that they use their mobile phones to make transactions and 55% have used them to open a new account.

Lessons on improving financial inclusion

Based on these findings, several clear lessons emerge for the public and private sectors, which are relevant for stakeholders in Latin America and around the world.

During COVID-19, national governments played a role in driving inclusion through the digitization of public assistance – 15% of respondents indicated that they accessed their first savings or deposit account this way.

Prepaid cards offered one way to quickly reach the unbanked or underbanked with digital payments tools. For example, in December 2020 and through 2021, Mastercard worked with the Government of the Dominican Republic and Banreservas to deliver state aid funds to 1.75 million Dominican families via contactless prepaid cards that could be used in local supermarkets and grocery stores.

Furthermore, private sector financial players should prioritize personalization to widen access to underserved segments, using tools to ensure simplicity and convenience whilst adding value and relevance.

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They also need to focus product development on credit, creating better products with easier access, supported by ways to empower innovative credit scoring or creative collateral.

Alongside this, there is an opportunity to reconceptualize financial education, moving away from the staid approach of old and providing an integrated, gamified approach that brings to life why and how to achieve greater financial security.

This will also help to build trust – in technology and in the financial system. Building trust comes by making a promise and delivering on it again and again. This can be achieving by ensuring consistent governance, robust cybersecurity and strong consumer protections.

Collaboration across the public and private sectors continues to be essential, to accelerate inclusion and ensure interoperability between the technical, regulatory, financial and infrastructural ecosystems.

Global efforts to improve financial inclusion

The EDISON Alliance, launched a couple of years ago by the World Economic Forum, is an example of this in action, with members working together to identify specific areas of the economy to accelerate digital and financial inclusion, and collaboration around investment, tools, the regulatory landscape and ways to ensure trust in technology.


How is the World Economic Forum fostering a sustainable and inclusive digital economy?

Financial inclusion is also a key topic at this year’s B20 in India – the official G20 dialogue forum with the business community – and this will undoubtedly continue as Brazil takes up the mantle as the host next year.

Together, we can build a better model for financial inclusion and digital transformation, to empower people and ensure equitable and sustainable economic growth.

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The views expressed in this article are those of the author alone and not the World Economic Forum.

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