Financial inclusion cycle in Latin America

In 2020, the cash preferring segment in Latin America significantly decreased, as more people adopted fintech platforms. Before the COVID-19 pandemic, around 45 percent of the population did not use any financial product, while five months after quarantine, this share dropped to 34 percent. People willing to try jumped from 10 percent to a quarter of the population during the same period.

Distribution of the adult population before and during the COVID-19 pandemic in Latin America in 2020, by financial inclusion stage

Characteristic	Pre-COVID	5 months after quarentine
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Release date

October 2020

More information

Region

LAC

Survey time period

between June and August 2020

Special properties

the study focuses on Brazil, Mexico, Argentina and Colombia. It consisted of an intensive review of data made available by governments and financial institutions, as well as in-depth interviews with 18 financial service providers, including the most relevant traditional banks and neobanks/fintechs

Supplementary notes

The source establishes an approach to financial inclusion, which categorizes consumers according to six pre-defined stages within the financial inclusion cycle:
1. Cash-only consumers: people who do not use financial services.
2. Cash preferrer: people with access to at least one financial product but who uses it rarely.
3. Willing to try: People with a financial account who make small deposits.
4. Cash displacer: People with a financial account who use their basic features, such as transfers, purchases, and bill payments.
5. True believer: People with a financial account who use more advanced features like personal loans, insurances, investments, etc.
6. Master: people with frequent use of advanced banking products.

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