The potential of mobile banking in Peru as a mechanism for financial inclusion
The Peruvian economy in recent decades has grown in step with growth in the financial system. However, banking penetration as a proportion of GDP has remained static at around 30% which is below other countries in the region, even those with lower GDP per capita. Access to products in the formal financial system is especially difficult for rural or low-income households. In line with the interesting international experience in other emerging countries, the E-Money Act was passed in 2012 with the main aim of increasing levels of financial inclusion. The high level of penetration of mobile technology in the country makes it an attractive channel for expanding financial services, since it is accessible and used every day by most of the population: according to the ENAHO 2011 National Household Survey, 75% of households have a cell phone (24 million lines in a country of 30 million inhabitants). This paper aims to set out the current state of development of mobile banking and estimate the potential demand for mobile banking as well as e-money. To achieve this aim, we use survey information to discover the main socioeconomic characteristics of individuals as well as the determining factors for their preferences regarding the use and frequency of mobile banking and connected services. Looking at the information from different angles and with different filters, one can see that at income quintile level, the development potential for mobile banking averages around 40%, taking into account the current availability of mobile devices and the current level of banking access. The highest potential is in quintiles 2 and 3, where it runs above 50%. When this information is segmented into educational levels, the highest potential is among those with secondary school education, where it is around 70%. This is due to a combination of high cell phone penetration and low access to the banking system. These results point to an major opportunity for developing mobile banking, taking advantage of the wide prevalence of devices, much higher than current banking access. It could be used as a tool for accessing the financial system, especially for those groups who are currently excluded.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Hugo Perea & David Tuesta & Alfonso Ugarte, 2012. "Lineamientos para impulsar el Credito y el Ahorro en el Peru," Working Papers 1301, BBVA Bank, Economic Research Department.
- Prior, Francesc & Santoma, Javier, 2008. "La banca móvil como catalizadora de la bancarización de los pobres: Modelos de negocio y desafíos regulatorios," IESE Research Papers D/738, IESE Business School.
When requesting a correction, please mention this item's handle: RePEc:bbv:wpaper:1325. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (OSCAR DE LAS PENAS SANCHEZ-CARO)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.