Using Data to Support Mexico's National Financial Inclusion Strategy
In 2016, Mexico introduced its national financial inclusion strategy, which is supported by six 'pillars': (1) financial education, (2) technological innovation, (3) the development of financial infrastructure in underserved areas, (4) increased access and use of formal financial services for the underserved and excluded populations, (5) client protection, and - one that is very close to our hearts at MIX - (6) the generation of data and measurements to assess financial inclusion. The national strategy was lauded by the financial inclusion community and, according to the World Bank, the implementation of this plan has the potential to enable access to a transaction account for an additional 29 million adults.
A key challenge for Mexico will be to extend financial access to currently underserved or excluded population segments throughout the country. With that in mind, and with generous support from the MetLife Foundation, we built the Interactive Dashboard for Mexico to analyze financial access at the national, state and municipal levels. The dynamic data visualization can help the government, financial service providers (FSPs) and funders identify the geographic areas currently underserved or excluded, and take action to increase the penetration of financial services.
For policy makers and other government officials who want to support the "development of financial infrastructure in underserved areas" (Pillar 3), one measure could be access points per capita to determine whether supply is meeting demand. As can be seen on the Supply and Demand Ratio tab, states including Oaxaca, Puebla and Veracruz have as few as 7 financial access points per 10,000 adults. Using incentives, policy tools and regulations, government officials can encourage FSPs to expand operations in specific municipalities where supply is falling short of demand.
Similarly, to "increase access and use of formal financial services for the underserved and excluded populations" (Pillar 4) FSPs can target states where demand outstrips supply and are primarily served by development banks – states including Guerrero, Colima and Oaxaca.
Additionally, states with large adult populations but few credit and deposit accounts offer opportunities for FSPs to expand existing service offerings or launch promotional campaigns to encourage greater usage of current service offerings.
For funders looking to support "financial education" (Pillar 1), municipalities with high poverty rates but relatively low credit and deposit amounts could be supported through financial literacy efforts. Because higher illiteracy rates tend to negatively impact the usage of financial services, municipalities such as Chiapas, Guanajuato and Puebla could benefit greatly from increased financial education outreach.
With the Interactive Dashboard for Mexico, users can drill down to uncover actionable intelligence often obscured by analysis conducted at the national or state level. Even in states seen as hubs for financial services, including Quintana Roo, access points are unequally distributed across its municipalities. For example, Benito Juarez contains around 48 percent of the state's total access points, whereas Jose Maria Morelos, Bacalar and Lazaro Cardenas contain fewer than 2 percent of access points combined (and each one is well below the median for number of access points per 10,000 people).
As was noted in an article written by the Alliance for Financial Inclusion, "when it comes to crafting smart financial inclusion policies and effective regulation, evidence and data are key." As Mexico transforms its national financial inclusion strategy into action, the Interactive Dashboard for Mexico and its underlying, granular data can help market actors identify and address the opportunities throughout the country.