Peru’s Race to Reach Full Financial Inclusion

Renso Martinez|Mar, 2016

Peru has been praised in recent years as a country deeply committed to reaching full financial inclusion. And the country has certainly earned that recognition, reaching around 91% of the adult population as of 2014. Yet, despite Peru’s rapid increase in formal financial services coverage there are still districts where Financial Service Providers (FSPs) have yet to arrive. Reaching these districts requires a continued commitment from the FSPs, especially privates ones since they justify around 93% of access points. It will also require the identification of which districts are in need of service provision, based on both supply- and demand-side data. That is where MIX’s data visualization platform, FINclusion Lab, can provide insights to drive business planning and expansion.

Plotting a Course for Increasing Access

Expanding service coverage in the country requires an in-depth analysis of the socio-demographic characteristics of districts with access points in order to determine the infrastructure required to meet the needs of the local market . For example, in sparsely populated areas, low-cost options such as bank correspondents could provide adequate financial services while brick-and-mortar locations might be required where the number of transactions per person is estimated to be higher. Often, entry into new markets can begin with basic services such as deposits, domestic services payments, remittances, and transfers.


Taking a first read of the demand indicators on Table 1, it’s evident that:

1. Ancash region has the largest number of districts without financial services access, representing around 132,000 adults.

2. Cajamarca region has the highest concentration of adults without financial services access (163,000) distributed in 59 districts.

3. Apurimac and Ayacucho regions showed higher proportions of adult population (26%) without financial services access, representing 58,000 and 91,000 respectively.

From these four identified regions, we dig a bit deeper to understand poverty and rurality, both criteria that consider lower incomes and less concentration of population where it’s possible that exists lack of infrastructure on dwellings and communities (absences of roads, telecom, not permanent water and sanitation, among others), simplifying the analysis of the districts to be targeted by FSPs.

Considering the results of the Table 1, choosing the poverty criteria, districts from Groups 1 located in Ayacucho and Ancash regions would be the perceived easy wins for private FSPs due to the lowest poverty levels (31.8% and 36.8% respectively). But changing by rurality criteria, the lowest levels on districts from groups 1 and 2 in Ayacucho region (27.1% and 29.5% respectively) would be perceived as best choice. This last result is close of reported on districts where CMACs have presence (rurality on 28.2%) and far from other FSPs (between 3.4% to 18.8%), if we refer on results of table 2.

The main challenge facing FSPs is lack of critical mass. In the districts reviewed, average adult population doesn’t exceed 1,500 people per district. Among private FSPs, the Cajas Municipales take the lead in serving poor, rural clients and also serve in districts with lower client numbers when compared to other FSPs. The state-owned Banco de la Nación is the one unique player that satisfies all conditions for the majority of districts in the four above mentioned regions.

Building on the Banco de la Nación network

Another method for private FSPs to expand their coverage is considering the districts where Banco de la Nación has a presence, considering it has the largest network of access points covering all the 197 provinces of the country. In that sense, we can see that:

1. FSPs accompany the state bank on same districts. There are 732 districts where Banco de la Nación kept its presence between 2013 and 2014. From this number, other types of FSPs entered only 7% or 54 of these districts, maintaining the predominance of Banco de la Nación.

2. FSPs displaced the state bank. Between 2013 and 2014 there were only 13 districts that Banco de la Nación left and only in four of them did FSPs install their own access points after reaching break-even and remaining as the sole FSP.

3. FSPs share offices with the state bank. This could be a precursor to point number 2 where private FSPs offer some services using Banco de la Nación infrastructure and eventually they can go out on their own.

Considering Banco de la Nación is the sole provider in 282 districts and the number of shared offices is estimated at more than 200 (distributed between 16 FSPs), it’s expected that these private players eventually take over the role of the state bank in the provision of financial services.


Our analysis shows that the districts where Banco de la Nación is the sole provider of financial services show different levels of poverty, rurality, and average adult population as compared to other districts with private FSPs, so, the shared offices is a smart way to approach entry into these districts. Given the social and economic gaps on districts where private FSPs are already present and those where they are not present; it will take some time for these FSPs to decide to enter with their own infrastructure. The Cajas Municipales could be the next to take this step given the similarities between the districts where they currently work and those districts that are currently unserved.

Peru’s progress should be seen as evidence that a strong national strategy and careful implementation can rapidly increase financial services coverage. But it should also highlight the challenge of reaching poor and rural districts even in a country dedicated to achieving full financial inclusion.