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Financial Exclusion and Informal Financing in Ecuador: The Relevance of Microfinance

Author

Listed:
  • Paola Martina Pucha Medina

    (Universidad de Cantabria)

  • Belén Díaz Díaz

    (Universidad de Cantabria and SANFI)

  • Rebeca García-Ramos

    (Universidad de Cantabria and SANFI)

Abstract

This chapter discusses financial exclusion and microfinance in Ecuador, with a focus on understanding the relevance of microfinance as a tool to combat financial exclusion and informal finance. The main goal of the research is to analyse the role of microfinance in promoting financial inclusion, particularly for marginalised populations lacking access to formal financial services. The study outlines the evolution of the microfinance sector in Ecuador, detailing its background, growth, and the types of products offered, such as microcredit. It also highlights the challenges posed by financial exclusion and the rise of informal financing solutions, such as moneylenders and personal networks, in response to the lack of formal financial services. Key findings indicate that microfinance institutions (MFIs) have become an essential part of the financial system, especially within the Popular and Solidarity Economy in Ecuador. They play a critical role in improving the living conditions of marginalised communities by providing small loans and fostering entrepreneurship. Despite the progress, challenges remain, including geographic limitations and high operational costs for microcredit, as well as the need for better regulatory frameworks and financial education to deepen financial inclusion in Ecuador​.

Suggested Citation

  • Paola Martina Pucha Medina & Belén Díaz Díaz & Rebeca García-Ramos, 2025. "Financial Exclusion and Informal Financing in Ecuador: The Relevance of Microfinance," CSR, Sustainability, Ethics & Governance,, Springer.
    • Handle: RePEc:spr:csrchp:978-3-031-86337-0_14
    DOI: 10.1007/978-3-031-86337-0_14
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