WASHINGTON, CMC – The Inter-American Development Bank (IDB) Group has launched FINLAC, a new initiative to promote financial inclusion by ensuring that the most vulnerable people in Latin America and the Caribbean (LAC) can access the financial services they need.
FINLAC, a joint effort by the IDB, IDB Invest, and IDB Lab, serves as a one-stop shop for advancing financial inclusion, supporting governments and accompanying firms, and igniting innovation in developing and implementing effective policies, reforms, and business practices to create inclusive financial markets in the region.
The IDB said that Latin America and the Caribbean are among the world’s most underserved regions in financial services.
It said about 27 percent of people aged 15 and older are excluded from formal financial services, compared to three percent in high-income countries. Only three in 10 people aged 15 and older have obtained a loan with a financial-sector entity in the last year, as opposed to three in five adults in high-income countries.
The IDB said that the initiative will prioritize understanding the barriers to financial inclusion faced by rural communities, indigenous and Afro-descendant populations, women, migrants, older adults, and micro and small businesses.
It will also promote digital transformation to accelerate financial inclusion and resilience, enhance payment ecosystems to facilitate fast retail transactions, and enable responsibly and consented financial consumer data sharing with third parties, known as open finance.
“With FINLAC, the IDB Group is very proud to propose an institution-wide hub that can support private—and public-sector stakeholders with their initiatives and projects to promote financial inclusion in Latin America and the Caribbean.
“FINLAC will generate policy-relevant knowledge and data; test innovative business models and private-sector solutions; and disseminate recommendations, best practices, and evidence on policies and innovations to build more inclusive financial markets,” said Eric Parrado, chief economist and general manager of the Research Department at the IDB.
FINLAC’s website offers a unique database dashboard with comprehensive country-level data organized into four areas: financial institutions, infrastructure, barriers to access, and ownership of financial products.
The IDB said FINLAC is already engaged with both private- and public-sector partners, such as Amazon Web Services, Mastercard, Visa, the World Economic Forum (WEF), the Institute of International Finance (IIF) and CGAP, an independent think tank housed at the World Bank.
It said that FINLAC collaborates closely with other stakeholders, including governments, financial institutions, fintechs, development agencies, multilateral organizations, academia, and foundations.
During the launch, the IDB Group unveiled a “Digital Payment Ecosystems in Latin America and the Caribbean” report that analyzes the state of payment systems in the region and identifies good practices and reform processes that may contribute to improvements in financial and digital inclusion.
Developed in collaboration with Analistas Financieros Internacionales (AFI), the study includes report cards for ten countries.
The IDB, in collaboration with the Bank for International Settlements (BIS), also launched the Fully Scaleable Settlement Engine (FuSSE) project, which will provide central banks with open-source technology to facilitate and enhance payment systems and technical assistance to develop public policies and regulatory frameworks and strengthen institutional capacities, further supporting the IDB’s efforts to promote financial inclusion and well-being in the region.
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