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BANSEFI fosters financial inclusion through its programme Somos Mexicanos

BANSEFI fosters financial inclusion through its programme Somos Mexicanos

​​​​​​​​B​RUSSELS, 23 October 2017​ ​​​​​​–  BANSEFI, as a development bank, works on enlarging financial inclusion of those coming back to Mexico. Given the new migration policy in the United States, Mexico expected an increased number of Mexicans being repatriated. Somos Mexicanos (We are Mexicans) is part of the protection mechanism established by the ​government to strengthen reinsertion of Mexicans coming back from the United States to their homeland. It aims at enhancing and protecting social and cultural bonds for a more dignified and productive return.

“Financial and social inclusion of repatriates will have a major impact on families' well-being and Mexico's development," said Miguel Carballo, Deputy General Director of Corporate Strategy at BANSEFI. 


The development bank faces challenges:
  • Mexicans being repatriated may not hold official documents

  • Their assets remain in the United States

  • They lack of financial inclusion in Mexico

To address this situation, some pillars must be built to provide the necessary conditions to allow customers to reap the benefits of the formal financial market. 


Financial education
It must be designed to cater to the needs of those involved. The information given to customers depends on the sophistication of the products or services to reduce information asymmetry among both parties. Banks shall offer tools for customers to make informed decisions.
Regulation
Regulatory innovation can resolve challenges. For instance, the Migration Identification Document (Constancia de Repatriación) allows repatriated Mexicans to hold an official identification document and a proof of residence.
Financial product and service availability
Having many options to choose from does not increase consumer satisfaction. Low income and vulnerable groups are not an exception. When working on financial inclusion of low income population or other vulnerable groups, it is imperative to offer the basic products they need to satisfy their immediate needs during an initial phase of financial inclusion.
Financial ecosystem
For financial inclusion to be effective, there must be a strong financial ecosystem. Although access in terms of infrastructure has increased during the last years, Mexico still reflects a delay in comparison to other countries with a similar market size.
Operational flexibility
Brick-and-mortar and internet banking remain prevalent in Mexico. However, mobile branches may also operate as long as they comply with banking issues like money laundering and consumer data protection. There must be operational flexibility to reach vulnerable customers, at a lower cost. It will overcome barriers for financial inclusion like time and transportation costs.

Somos Mexicanos Airport.jpgOn the ground, BANSEFI settled several stalls at points of repatriation in collaboration with the National Institute of Migration (INM). There are especially set up in airports along the American border, from Tijuana to Tamaulipas. At Mexico City International Airport only, three times a week, a plane lands repatriating Mexicans.  These BANSEFI stalls allow them to open a bank account, change currency, deposit money or access other services such as micro insurance.

María Antonieta Paz Rotunno, Adviser on Financial inclusion and special projects at BANSEFI, explains that financial literacy is essential is such cases. Product innovation also leads to complex products and services: “The more complex the financial product or service, the more comprehensive the information that must be presented to customers". Another obstacle is information asymmetry: “Customers also need means ​to reach information, they must be taught about tools at their disposal to evaluate the information available about options, responsibilities and risks to which they are subject".

Financial education is not an antidote for predatory practices but will always improve customers´ awareness and protection from such practices. It reduces the vulnerability of customers from predatory practices, and this is what BANSEFI aims at. María Antonieta Paz Rotunno summarizes financial education as such: “Financial education allows customers to overcome uncertainties in the financial sector. It should be present throughout the duration of any financial inclusion program. Innovative products and new financial channels should provide financial education, a tutorial or be user friendly, as it may apply."

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Financial inclusion; Remittances; Branch management