Financial Inclusion Status in Peruvian Households

Identifying microeconomic factors affecting the likelihood of financial inclusion for households

This paper focuses on the determinants of financial inclusion (FI) for Peruvian households. Its goal is to foster welfare of individuals by focusing on the poorer households that are the ones most affected by financial exclusion. The paper discusses banking penetration in Peru against other Latin American countries and also throws light on access to banking services in the country. By using a Probit model in a household survey to analyze FI characterestics, the paper makes the following key points:

  • Being a woman, living in a rural area or having a low income and educational level may reduce the likelihood of being included in the formal financial system;
  • Households with cash flow problems are more prone to use banking services than those with savings;
  • Living in small cities is a disadvantage for FI.

The paper concludes by stating that the approval of e-money regulatory framework by the Peruvian government, improvement in technologies, and the high penetration of mobile phones, would make mobile banking a more efficient alternative to traditional branch banking, especially in terms of the cost of product delivery.

About this Publication

By Tuesta, D. , Cámara, N.