Given that the project Haku Wiñay is in the final stage of its first expansion phase, after carrying out the corresponding pilot test, Proyecto Capital decided to undertake a qualitative study. This study sought to explore, selectively, the results achieved and the lessons that arise from the aforementioned financial abilities promotion component.
In order to write this InShort, the last version of the qualitative study’s final report was used, after it had been debated and had received feedback from peers at MIDIS and FONCODES. This InShort contains the main outcomes of the study mentioned above. The study started with a review of the main training materials prepared in FONCODES. Then, three districts where the project is executed were visited and their outcomes compared. In each of the visited locations, the project’s users were interviewed (savings accounts holders and non-holders) as well as the personnel in charge of executing the project. This amounts to a total of 78 individual interviews, a part from one interview held in the Foncodes’ headquarters in Lima.
Ahorro para Todos (Savings for Everybody) is an ongoing project financed by the Inter-American Development Bank (IDB) and implemented by the microfinance institution Financiera Confianza. This project seeks to test a financial education package and provide poor rural women with a savings account—looking to properly include this sector of the population into the formal financial system—within the framework of a business model.
This inshort summarizes lessons stemming from the Ahorro para Todos project in the region of Apurimac, from the project’s proposal, regarding its scope, the financial education materials and the form of intervention in the host communities.
Upon request of the Ministry of Education of Peru (MINEDU), the Instituto de Estudios Peruanos prepared the document “Reflections and Recommendations for the Design of an Economic and Financial Education Strategy for the Republic of Peru” as part of Proyecto Capital. The document provides the MINEDU with policy recommendations in order to co-lead, within the framework of the Multi-Sectorial Commission for Financial Inclusion (Comisión Multisectorial de Inclusión Financiera – CMIF, in Spanish), the development of a national economic and financial education strategy. This strategy is aligned with the basic education curricula adopted in June 2016, and seeks to guide and enhance the articulation of efforts among the different institutions and organizations working in this field.
This policy brief is a summary of the above-mentioned document and it aims at providing the reader with basic knowledge about: a) the main characteristics of economic and financial literacy strategies around the world; and b) the factors that should be considered for the development of an economic and financial literacy strategy in Peru, with a particular emphasis on citizenship education as well as on the implementation of actions that would support/ serve the implementation of the economic and financial literacy strategy. Subsequently, this document identifies some policy challenges and proposes a series of ideas to promote the discussion on inter-sectorial and inter-institutional articulation, with an aim to ensure the adoption and implementation of a legitimate, effective and contextualized economic and financial literacy strategy that is sustainable over time. Finally, this document proposes a road map to advance the development of that strategy, considering the guidelines provided in the document “Reflections and Recommendations for the Design of an Economic and Financial Education Strategy for the Republic of Peru”.
As a result of globalization and technological development, all over the world, financial services are experiencing a fast-paced and wide-scoped growth. In Peru, these services have also been developed in both the banking sector and in companies within the real sector (e.g.: technological entrepreneurships) has recently started to develop financial services as well. These new forms, agents and channels through which financial services are being provided generate greater financial inclusion, something that governments can take advantage of.
In order to further develop such financial services, the government’s involvement —especially that of regulatory entities—is highly important. Eficient regulatory schemes that focus on the risks associated to these services are the only way to ensure a formal and eficient growth that reaches the population not yet served by the financial system.
This InShort aims to show how regulation plays a fundamental role in the development of new and inclusive financial services in Peru. It also underscores the importance of aligning regulation with the objectives that the State needs to accomplish in order to promote the growth of financial services and financial inclusion, independently of the provider offering the service. In order to achieve this, this InShort will present, first, the scope and types of inclusive financial services that have been developed around the world in general, and in Peru in particular. Then, it will put forward general and specific criteria that should be taken into account when developing suitable regulation for financial services in Peru. Finally, as a conclusion, it will present the text’s key ideas.
So far, different governmental and non-governmental agencies have developed financial orientation programs. Some programs seek to improve financial knowledge; others, to promote financial inclusion and/or deliver costumer protection tools. While it is true that most of the institutions claim to carry out activities that aim at providing financial education or at promoting a financial culture, only some of them carry out activities that the Organization for Economic Co-operation and Development (OECD) categorizes as financial education. Therefore, it is necessary to reach a common definition of what is understood by financial education as well as to establish what to educate financially consists of, in order to be able to create a strategy for promoting financial education.
In this context, in 2012, the Mesa de Educación Financiera-MEF (Board for Financial Education) was created thanks to the coalition of twelve institutions that look to promote the debate on financial inclusion in Chile. The objective of the board is to “contribute to people acquiring a better understanding of financial concepts and products so that they can make informed decisions, evaluating risks and opportunities”.1 Also, the MEF sought to promote a National Financial Education Strategy with a scope wider than that of the programs currently being developed in the country. Since the beginning, the MEF has had the support of the Instituto de Estudios Peruanos - IEP (Institute of Peruvian Studies), the International Development Research Centre (IDRC) and the Ford Foundation, through Proyecto Capital (Capital Project).
The project “Complementary Technological Platforms for Financial Inclusion” implemented sales systems that used POS (Point-of-Sale) in rural businesses of the Junin region in Peru (2013-2014) in order to promote the everyday use of this technology among the local population.
This InShort presents the most relevant findings regarding the businesspersons who acquired a POS system as part of the project. This document aims at making this knowledge available so that it can be used in other initiatives of this type and serve as a starting point when thinking about the population’s needs in terms of information and follow-up to the use of technologies that envision financial inclusion.
In over seven years, Proyecto Capital has developed 17 financial education programs in 10 Latin American countries, linking each financial education program to social protection programs. The implementation of financial education programs has been possible thanks to alliances formed with governments, in order to actively incorporate political authorities and financial institutions’ officials. Successful experiences have led governments in various countries to include financial education components in their social programs. Such experiences have allowed to capitalize on valuable lessons that make visible the importance of promoting financial inclusion by working directly with excluded populations and at the same time with the sectors in charge of offering financial services. Both interventions, with the population and with financial institutions, aim to bring the financial system closer to the population as well to promote the use of financial products in order to reduce vulnerability among this groups of the population, ultimately stimulating development and wellbeing.
This InShort reviews Proyecto Capital’s different financial education experiences in order to underscore their main achievements and gather the core lessons that derive from these experiences, after over seven years working in the promotion of financial inclusion of vulnerable populations. Likewise this document proposes new challenges and some guidelines that should be followed when developing and implementing public policies in order to continue and improve the process of mainstreaming financial inclusion among social protection policies targeting the most vulnerable populations in Latin America.
This inshort offers insight into the best strategies for taking advantage of the benefits of using technologies for financial inclusion for users of social programs. It summarizes the results of an intervention for financial inclusion of users of the JUNTOS CCT program, based on the installation of POS technology for making purchases with debit cards at businesses near the users’ homes.
The Technological Platforms pilot project was implemented jointly by Visa International, VISANET, the Banco de la Nación (BN), the Ministry of Development and Social Inclusion, the JUNTOS Program and the Instituto de Estudios Peruanos (IEP), as part of Proyecto Capital. These public and private stakeholders sought to provide a service network for users of the JUNTOS Program using POS sales technology in 10 local businesses located in four districts in the department of Junín.
The project is relevant because it places importance on addressing aspects related to both supply (e.g., technologies for the use of services) and demand (e.g., FE) to guarantee a full process of financial inclusion. The main lesson from these observations, however, is that the mere installation of a technology platform does not automatically result in its use by vulnerable populations.
This paper shows the impact of the Promotion of Savings Pilot Program (PSPP) on productive investment (agriculture, livestock and business initiatives) and on food consumption, distinguishing between consumption in the highest-income and lowest-income months of the year.
The results show a positive effect on productive investment, which suggests an increase in total savings. There are differences in investment depending on the degree of poverty: for the poorest 50 percent of households, there has been an impact on the use of agricultural inputs, while for the least-poor 50 percent, there was an impact on the purchase of large animals, which underscores the lower investment capacity of the poorest households in the population studied.
The results also show that the PSPP has not resulted in improved food consumption in the lowest income month. On the contrary, households belonging to the treatment districts (which received financial education) have a lower level of consumption in the months when the household has the lowest income. It is likely that the greater investment in agricultural inputs, along with the promotion of a fixed amount of saving during the training, have contributed to these results. Given the type of investment found (in productive assets and agricultural inputs), however, it is very likely that these negative results will reverse in the future, because of higher income from farm and livestock resulting from increased investment.
In this paper the authors want to highlight the benefits of savings accounts for women by illustrating the successful experiences and lessons learned with two Peruvian government projects designed to mobilize savings amongst its poor rural populations, mostly in the Southern Highlands region of the country.
The report is as follows: Section II briefly covers literature on savings both in the general context and particularly to women. Section III first outlines the current context of Peru, and later the two government programs. In Section IV we cover the impacts of the aforementioned programs on female beneficiaries. Lastly, in Section V we conclude with suggestions for future use of savings accounts in development projects.