Case Study Details - The EDISON Alliance - Fintech and Financial Inclusion in Latin America and the Caribbean

Challenges to financial inclusion in Latin America and the Caribbean (LAC) as well as policy prescriptions to enhance financial inclusion in region have become a focus of inquiry in recent years. The literature finds that even though the degree of financial inclusion in LAC is mostly in line with fundamentals, there remain important gaps and cross-country variations, especially with respect to financial inclusion of households. This paper analyses whether fintech can help minimize financial inclusion gaps in LAC and how governments can leverage fintech development to foster financial inclusion. To this end, the paper documents the changes in financial inclusion in LAC since 2014, including new forms of financial inclusion driven by the development of fintech.

Impact / Outcome

In the case of Argentina, financial innovation regulation has produced a significant change in the banks’ process to onboard new clients, and broadened the spectrum of means of payments, with new players emerging in the market. These new factors increase the competition and enable banks to enlarge their portfolio of financial services. On the one hand banks can grant credit lines to Non-Financial Credit Providers which, in turn, can lend while deepening financial inclusion. On the other hand, it is important to enhance the scope of consumer protection to the users of Non-Financial Credit Providers and, for example, help avoid over-indebtedness.

Funding sources

Public

Key Metrics

Use of fintech to minimize financial inclusion gaps