Colombia Watch: Financial Inclusion Challenges, Bank Charge Impact Warning

Jun 2019
Colombia, June, 12 2019 - Levels of financial inclusion in Colombia have risen but challenges persist, financial services watchdog Superfinanciera said in a report.The country’s financial inclusion indicator rose 1.3 percentage points last year, bringing the number of adults with at least one financial product to 28mn.

The report was produced by the regulator and Banca de las Oportunidades, a government financial inclusion program administered by state-owned foreign trade bank Bancoldex.

The two main challenges in the area are reaching the 6.3mn adults, or 18.6% of the adult population, that remain excluded, and ensuring that more people with financial products actually use them. According to the report, last year 84% of adults with a financial product had such products active or in use.

Colombian banks generally view fintechs as potential partners, while innovative digital banking platforms, such as Bancolombia’s Nequi and Banco Davivienda’s Daviplata, which are aimed at lower-income segments, are helping in the fight.

Indeed, growth in technology-based solutions has helped spur inclusion, the report said. Last year the government’s Sedpe scheme got under way. A Sedpe is a lightly regulated digital entity designed to offer affordable deposit and payment services to low-income segments. The first, Movii, was launched in 2018.

Colombia’s network of bank correspondent service providers also expanded apace.

Last year was a watershed for internet banking in Colombia as it surpassed branches for the first time ever in terms of number of transactions and the amount of money moved.


Number of correspondent service providers: 135,797

Number of branches: 7,812

ATMs: 16,192

POS: 421,946 Colombian banks have issued a warning over the fallout that a planned overhaul in bank fee rules may create.

A bill in congress would prohibit lenders from charging maintenance fees for savings accounts and debit and credit cards, among other changes.

Banks have said such fees are linked to the costs lenders incur for providing these types of services, local paper La República reported.

The rule change, if approved, could result in a 3.1tn-peso hit (US$950mn) for banks, banking association Asobancaria was reported as saying.

Loan interest rates, as a result, may also rise between 0 and 1 basis point and weigh on loan growth, warn banks, adding that the move could negatively impact financial inclusion efforts as access to some traditional and digital products, particularly those aimed at low-income segments, may become more restricted.

The bill’s backers say it is part of efforts to spur financial inclusion in the country.

The government imposes a tax on certain bank transactions, known locally as 4x1000. Under the regime – originally introduced as a temporary revenue-raising scheme – banks deduct 4 pesos for every 1,000 pesos moved and then pass on collected funds to the government. Efforts have been made to scrap 4x1000, but it remains in place.

For January-April Colombia’s domestic commercial banks reported profits of 2.90tn pesos while the country’s foreign commercial banks posted 632bn pesos.

Source : BNamericas

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