technomadic_anibal-bustillo

8/4/2019 TECHNOMADIC_Anibal-Bustillo

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Anbal Bustillo,

Armando Maldonado

Hernn Garza

ARE THE FINANCIAL SERVICES FOR THEUNBANKED POOR PEOPLE A BUSINESS

OPPORTUNITY? IT SHOULD BE?AN ONTOLOGY

Depto. Acad. de Sistemas Digitales - ITAM

[email protected]

Director Comercial - [email protected]

September 21-23,2011 - Nice-Sophia

Antipolis

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1

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2

Technomadic Interactive SC

[email protected]

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mailto:[email protected]:[email protected]


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1. Introduction

2. Financial Inclusion in Mexico

3. Strategies for reducing the social gap

4. Conclusions and Next Steps

Agenda


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Financial services Mexico reaches less than 25% of

total population and have presense in less than 38%of municipalities.

54% of international remittances (US $20 B) havefinal destination rural communities with less than20,000 inhabitants with minimal financial servicescoverage (28%).

Reducing financial gap is not enough to reduce thesocial gap. Digital inclusion and m-learning (micro-content) are mandatory

Traditional methods that focus on expanding bankinginfrastructure have proven to be insufficient.

A new value creation model needs to be adopted.

Introduction


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Fuente: CNBV.

Potential Coverage of Banking Agents

Financial Inclusion. Penetration Using Agents

Notes:Large Retail Stores :: Wal-Mart, Soriana, Chedrahui, Comercial Mexicana, Sears, Samborns, Coppel.

Small retail Stores Oxxo, 7 eleven, Farmacias Benavides, Farmacias del Ahorro, Farmacias Guadalajara, Waldos, Office Max, Mix Up, Muebles Amrica,Pitico, Promujer.

Diconsa: Only 25% of the stores have IT &Ccapabilities .Gas Stations (*) Not authorized as Banking Agent

11,066

2,775

9,324

568

1,570 1,692

5,801

8,578

32.9% 33.7%37.5%

42.3% 44.4%46.2%

74.9%

80.0%

0%

10%

20%

30%

40%

50%

60%

70%

80%90%

-

2,000

4,000

6,000

8,000

10,000

12,000

CommercialBanks

LargeRetail

Stores

Small RetailStores

Devel.Banks

Telecomm S&LThrifts

Diconsa Gas Stations (*)

# of Branches % Attended Municipalities

Numb

erofMunicipalities

FinancialServicesPenetration


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Target population

Fuente: Telecomm y CNBV, Reporte de Inclusin Financiera de diciembre 2010

915 (58%) of Telecomm branches are located in small cities with less than 20,000

inhabitants

Customer Segment Trype 1 and Type 4 are the target markets to increase financial

inclusion using local switching and mobile technology respectively

Coverage

CustomerSegments Municipalities Telecomm Bank Branches

MobileCoverage

Type 1 535 - - -

Type 2 705 705 705 705

Type 3 281 281 - 281

Type 4 676 - - 676

Type 5 92 92 - -Type 6 142 - 142 142

Type 7 25 14 25 -

TOTAL 2,456 1,092 872 1,802


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Source: Telecomm & CNBV, Reporte de Inclusin Financiera de

december 2009

The new business model for the non-bank branchless government agency, will cover a

total of 1,921 municipalities out of 2,456 (78.2%).

The financial inclusion could be increased from 35.5% (banks branches only) to 78.2%

using networks of agents in municipalities of category type 4.

Financial Inclusion Increment

Mobile Money Services & Financial Inclusion

872

373

676

35.5%

50.7%

78.2%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

-

500

1,000

1,500

2,000

2,500

(Types: 2,6,7) (Types: 3,5) (Type: 4)

Potential

number of

beneficiaries

6.2 millions

Numb

erofMunicipalities

FinancialServicesPen

etration


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Closing the Social Gap

Leverage digital inclusionprogram 24,000 digitalcommunity centers

Increase financialinclusion 1,211municipalities

Technology adoption

Cashless community M-learning model (mobile

based distance learningeducation)

Telecomm agentsdevelopment

Social Businessapproach


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Reducing the social gap Financial inclusion

Financialinclusion

More bankaccounts

A broader definition of financial inclusion is needed (*)

http://mmublog.org/blog/financial-inclusion-not-just-about-bank-accounts-anymore/

Rather than starting with bank accounts and working out how we candeliver them to the poor, a more pragmatic approach is to start byunderstanding their financial needs so that an enabling environmentfor products that meet them can be established

FinancialServices

P2PMicro-paymentsBill Payment

Remitances

LocationsType1(535)

No BanksNo TelecommNo Mobile

LocationsType 4(676)

NO BankNo TelecommMobile access

Santiago Nuyoo, Oaxaca

Mobile PaymentMobile BankingE-Money

NewRegulation


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e-Inclusion or digital inclusion Activities related to

the achievement of an inclusive information society.

Reducing the social gap Digital inclusion

24,000 Community Centerswith access to satellite links and

internet services

Reduction of digital gap, needsthe development of digital skills,specially in the most vulnerablepopulation .

The Mexican Minister ofCommunications (SCT) coordinate a

project that includes a fiber opticbackbone that integrates network ofMexican states. This infrastructure iscomplements with satellite linksconnecting isolated and remotelocations.


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Reducing the social gap Technology adoption

Use ofTechnology toReduce theSocial Gap

Cash Less

M-Learning

Telecommagents

Air Time mins per transactionGreen e-money (1)

(1) http://sites.google.com/site/monederoecologico/home(2) http://movil.itch.edu.mx/M-Learning_Lab/Laboratorio_M-Learning.html

Educational use of mobile devices- Mobile Learning(2)

Creation andmanagement ofnetwork ofagents

Availability of relevant digitalcontent is a key success factorfor reducing the digital gap.
http://sites.google.com/site/monederoecologico/homehttp://sites.google.com/site/monederoecologico/home


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Companies (Networks of Agents) are not willing to invest in locations whosefamilies have to travel 4 or more hours to collect the money of governmentsocial benefit programs or remittances from their relatives in US.

Traditional methods that focus on expanding banking infrastructure throughagents, have proven to be insufficient.

Reducing the social gap A new category of business

Social Business is notsocial responsibility,philanthropy, or even

sustainability, but a newcategory of business.

CSR -- charity fund set aside by aprofit-maximizing company to dosome good in a local community.Foundation -- charitable organization

created to disburse fund from one ormore donors who seek to createsocial benefits throgh their giving .

Relying on charitable donations isnot a sustainable way of running

an organization

Social Business isdesigned exclusively to

deliver social benefits.There is no thought ofcreating revenue for anyinvestor.

It is immoral to make aprofit from the poor

Social Business Shared ValueResearch project at ITAM

http://www.filantropia.itam.mx/index.html


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Mobile technology is not enough to provide financial

services for unbanked people. Improved regulations, digital inclusion, and new

business concepts (social business) are needed toclose the social gap.

Request funds from the Technologies for FinancialInclusion Program (*) Sept. 2011 Test and implement technologies that help extend the reach

and improve the effectiveness of financial services formicro-enterprises and low-income households in Latin

America and the Caribbean Pilot and Proof of Concept execution

Conclusions and Next Steps

(*) http://www.tec-in.org/en


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Thanks

Q&A


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Source: CNBV, Reporte de Inclusin Financiera de diciembre 2009

36% of total population is located in rural zones

Rural: 5,000 15,000 50,000 300,000 < 1 million inhabitants

Metropoli: >1 million inhabitants

Rural 732 705 96% 694 95%

Transistion 678 537 79% 520 77%

Semi-urban 662 317 48% 297 45%

Urban 312 24 8% 35 11%

Semi-metropoli 61 1 2% 1 2%

Metropoli 11 0 0% 0 0%

TOTAL 2,456 1,584 64% 1547 63%

%Municipality type # of municipalitiesMunicipalities

w/o branches %Municipalities

w/o ATMs

Financial Services Coverage


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Total Population

Saving accounts

25% Debit accounts 36%

Credit card 17%

Personal credit 11%

Economically Active Population Government Financial programs 15%

Development banks 13%

Lack any type of financial service 35%

The informal sector employs 30% of the available

work force

Financial Inclusion in Mexico

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