Geospatial Data to contribute to the Argentina’s Financial Inclusion Strategy

Renso Martinez|Aug, 2018

14 August 2018

 

Near the end of 2017 was publically announced the Inter-American Development Bank approved a $20 million USD loan to support the implementation of the country’s National Financial Inclusion Strategy, at the request of the Argentinean government.  As a result, the Financial Inclusion Council was created with the aim of “reducing informality, increasing banking services and reducing interest rates for the most vulnerable sectors.”  The Minister of Finance leads the Council, with officials joining from the Ministry of Treasury and the Central Bank of the Argentine Republic (BCRA).  These developments signaled the importance of financial inclusion to Argentina, even as the country’s economy records declines in GDP

 

The Argentinian government, realizing the necessity of data to inform the development of the strategy, found partners in MIX and its FINclusion Lab project –generously supported by MetLife Foundation– that uses geospatial data analytics to identify, assess and monitor underserved areas of the country even down to the locality-level.  During the final quarter of 2017, MIX gathered input from local stakeholders to learn about the financial services sector.  Data collected with the support of these actors resulted in the Interactive Dashboard for Argentina, a data visualization tool that enables financial services providers and policy makers alike to make informed decisions about the expansion of services and products. 

 

As part of the project, MIX organized a roundtable in Buenos Aires in June 27th 2018 that included –during the morning session– staff from key regulators as BCRA on behalf the Financial Inclusion Council, as well as their counterparts from other countries including the Superintendencia de Banca, Seguros y AFP (Peru) and the Comisión Nacional Bancaria y de Valores (Mexico).  This roundtable enabled the exchange of experiences with financial inclusion efforts, with the express purpose of learning from each other.  A few key themes emerged, as a result of the guided conversations:

 

  • Direct involvement of local actors –especially the Financial Inclusion Council– on produce the strategy is crucial to empower and engage them through implementation.

  • For Argentina, the ‘bank correspondent’ access point type does not exist as it does for their peers; given the strong growth of these access points in other countries, Argentina appears to lag in terms of coverage.

  • In Mexico and Peru, metrics on ‘usage’ are applicable to various products including deposit, credit, and mobile banking; in Argentina, ‘usage’ metrics are focused exclusively on credit.

  • Measuring the ‘quality’ of financial products is challenging; the metrics used by each country are not standardized for comparison.

  • The most common channels for dissemination of the strategy are online publications and data download; Argentina might want to consider the online applications that facilitate data understanding for their users.

 

During the afternoon session, MIX also shared the key findings from the geospatial data analytics, presenting the interactive data visualization and receiving feedback from the participants.  Thanks to generous support from MetLife Foundation, MIX is now able to launch the Interactive Dashboard for Argentina publicly.  Similar to other countries included as part of the FINclusion Lab project, a primary goal for this effort is to help industry actors to uncover actionable insights that can inform financial inclusion strategies and outreach efforts.  A few key findings observed by MIX are listed below:

 

  • 96% of population lives in 1,430 localities (40%) of the country. For the rest of localities in the country (2,179) the average population is just 834 people, which is the most difficult barrier to justify presence for any FSP.

  • 483 localities (14% of the country that covers 80% of population) have three access point types including branches, ATMs and Self Services Terminal (SST). ATM is the most important channel considering in other 461 localities is the sole access point available.

  • Public banks are the only financial service provider in 571 localities (16% of the country that covers 7% of population). Just ‘Banco de la Nación Argentina’ has a presence in all provinces while other public banks have regional presence.

  • ATM and SST coverage expanded on average by 6% between 2012 and 2017 while branches expanded by only 1%. The number of ATMs and SSTs grew in all provinces, substituting channels in five provinces where the number of branches decreased.

  • The Buenos Aires province has 4.6 access points per 10,000 people as of 2017, which is below the national average (5.6), while Buenos Aires City tripled the national average (16.2). Of all the provinces, only Catamarca province registered a decrease in access points per 10,000 people due to a reduction in the number of branches and limited growth of ATMs and SSTs.

 

To explore the Interactive Dashboard for Argentina, click here.