The Financial Behavior of Rural Residents: Findings from Five Latin American Countries
This study summarizes the results of market research conducted in 2009-10 in five countries, namely, Colombia, Dominican Republic, Ecuador, Nicaragua, and Peru, to learn about the financial behavior and use of financial services among rural residents. The study used both qualitative and quantitative methods. Results provide a detailed portrait of rural residents that can serve as reference for anyone wishing to design financial services that would meet their needs. Findings include:
- The traditional nature of most rural residents poses challenges for financial service providers and discourages innovation;
- Farmers inability to influence the final sale income from crops limits their financial planning and creates barriers to loan access;
- Working capital credit and savings are the best known and most used formal financial services;
- Barriers to formal savings include lack of convenience in operating savings accounts and the perception that amounts are too small to deposit in a financial institution;
- Rural residents see credit as one of the main enablers of growth;
- Barriers to loan access include accessibility, high cost, conditions of the credit, and delays in evaluation.