Access to Financial Services in Colombia: The "Unbanked" in Bogota

How to make financial services available to the low-income population of Colombia?

This report provides an overview of the state of financial access in Colombia. It discusses:

  • The decline in access to financial services in Colombia;
  • The decrease in the number of current and savings accounts per inhabitant;
  • The lack of incentives for private banks to increase their level of intermediation and provide services to low-income clients;
  • The challenge of increasing intermediation to the poor.

The paper finds that:

  • Colombia's banks provide costly services mainly catered toward high-income clients;
  • Financial exclusion is associated with lower education;
  • The unbanked save and borrow largely in the informal sector;
  • Home ownership rate is high, showing that the unbanked have the capacity to build assets and are therefore bankable;
  • Location plays a role in financial exclusion;
  • Financial exclusion creates welfare losses for the economy.

For improved access to financial services, the paper recommends:

  • Regulatory incentives, supply and demand side initiatives;
  • "Smart subsidies" to bridge the higher transaction costs associated with the low-income segment;
  • The use of low-cost technology;
  • Simple product solutions;
  • The development of growth and income generating policies;
  • Financial education;
  • Governmental measures to increase demand for low-cost electronic banking services;
  • Building a better financial infrastructure.


About this Publication

By Solo, T. , Manroth, A.