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Demand factors that influence financial inclusion in Mexico: analysis of the barriers based on the ENIF survey

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Listed:
  • Carmen Hoyo
  • Ximena Pena
  • David Tuesta

Abstract

In Mexico 62% of adults between the ages of 18 and 70 do not have formal savings or credit products, even though 97% of adults have access to them through different channels. The difference between the supply and the effective use of the financial system means the existence of demand barriers that have not been explored fully so far. Thanks to the interest of the Mexican government in measuring and evaluating financial inclusion from the point of view of supply and demand, the first National Financial Inclusion Survey (Encuesta Nacional de Inclusión Financiera, ENIF) was applied in 2012 in Mexico. It has become a model in Latin America for the study of demand for financial services. Using ENIF data, and a probit model, we have analyzed the socioeconomic factors that from the point of view of individual demand, influence the decision of whether or not to use formal saving or credit financial services in Mexico. According to our analysis, the insufficiency or variability of income and self-exclusion are the most important barriers in the Mexican market. They are influenced by three types of factors: 1) variables that denote individual vulnerability, such as income level, gender, education and occupation; 2) geographical variables with respect to the size of the community in which the individual lives (towns with a population of less than 15,000 or more than 15,000; and 3) variables that appear related to a preference for the informal financial market, such as the capacity to respond to exogenous shocks and belonging to households with a capacity to save.

Suggested Citation

  • Carmen Hoyo & Ximena Pena & David Tuesta, 2013. "Demand factors that influence financial inclusion in Mexico: analysis of the barriers based on the ENIF survey," Working Papers 1337, BBVA Bank, Economic Research Department.
  • Handle: RePEc:bbv:wpaper:1337
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    References listed on IDEAS

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    1. Anzoategui, Diego & Demirgüç-Kunt, Asli & Martínez Pería, María Soledad, 2014. "Remittances and Financial Inclusion: Evidence from El Salvador," World Development, Elsevier, vol. 54(C), pages 338-349.
    2. Pascaline Dupas & Jonathan Robinson, 2013. "Savings Constraints and Microenterprise Development: Evidence from a Field Experiment in Kenya," American Economic Journal: Applied Economics, American Economic Association, vol. 5(1), pages 163-192, January.
    3. Andrés Murcia Pabón, 2007. "Determinantes Del Acceso Al Crédito De Los Hogares Colombianos," ENSAYOS SOBRE POLÍTICA ECONÓMICA, BANCO DE LA REPÚBLICA - ESPE, vol. 25(55), pages 40-83, December.
    4. Dean Karlan & Aishwarya Lakshmi Ratan & Jonathan Zinman, 2014. "Savings by and for the Poor: A Research Review and Agenda," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 60(1), pages 36-78, March.
    5. Claessens, Stijn, 2006. "Access to financial services: a review of the issues and public policy objectives," Journal of Financial Transformation, Capco Institute, vol. 17, pages 16-19.
    6. Johnson, Susan, 2004. "Gender Norms in Financial Markets: Evidence from Kenya," World Development, Elsevier, vol. 32(8), pages 1355-1374, August.
    7. Thorsten Beck & Asli Demirgüç-Kunt, 2008. "Access to Finance: An Unfinished Agenda," World Bank Economic Review, World Bank Group, vol. 22(3), pages 383-396, November.
    8. Stiglitz, Joseph E & Weiss, Andrew, 1981. "Credit Rationing in Markets with Imperfect Information," American Economic Review, American Economic Association, vol. 71(3), pages 393-410, June.
    9. Mark M. Pitt & Shahidur R. Khandker, 1998. "The Impact of Group-Based Credit Programs on Poor Households in Bangladesh: Does the Gender of Participants Matter?," Journal of Political Economy, University of Chicago Press, vol. 106(5), pages 958-996, October.
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    Cited by:

    1. Mariano Bosch & Angel Melguizo & Ximena Peña & David Tuesta, 2015. "Savings under formal and informal conditions," Working Papers 1519, BBVA Bank, Economic Research Department.
    2. Mariano Bosch & Angel Melguizo & Ximena Peña & David Tuesta, 2015. "El ahorro en condiciones formales e informales," Working Papers 1523, BBVA Bank, Economic Research Department.
    3. Llanto, Gilberto M. & Rosellon, Maureen Ane D., 2017. "What Determines Financial Inclusion in the Philippines? Evidence from a National Baseline Survey," Discussion Papers DP 2017-38, Philippine Institute for Development Studies.

    More about this item

    Keywords

    Financial Inclusion; financial institutions; barriers; personal finance;

    JEL classification:

    • C01 - Mathematical and Quantitative Methods - - General - - - Econometrics
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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