Evolution of Programs for the Unbanked in Latin America: Microlending at the Forefront
Despite considerable progress to expand the reach of financial services to the unbanked segment, a vast majority of the Latin American population remains marginalized from mainstream banking. While reasons differ by market, there is broad agreement that distrust of banks, pricing, risk issues, regulation, and distribution all play a role in the limited scope of mainstream financial services across a broad audience. As a result, this segment often relies on retailers for credit (and increasingly banking services in the form of savings accounts), specialty lenders, and informal or unregulated lenders.
In this Strategic Commentary entitled, “Evolution of Programs for the Unbanked in Latin America: Microlending at the Forefront,” Speer & Associates, Inc. (S&A) provides an overview of trends and developments in non-traditional ‘bancarization’ of key Latin American markets with special emphasis on microlending initiatives.
