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BANSEFI helps Mexicans to take care of their savings

BANSEFI helps Mexicans to take care of their savings

​​​​​​​Financial Diaries in an innovative methodology, a tool to obtain multi-dimensional qualitative and quantitative data on the lives of low-income households.  Based on Stuart Rutherford's methodology and already developed in South Africa and Kenya from 2012, the study has been conducted in 2013-2015 in Mexico​, called Diarios Financieros de México.

Sponsored by BANSEFI – the Mexican WSBI member – the 13-month study gives an insight into a sample of low-income households. Interviewed about every two weeks, they detail how they administrate their money, financial transactions, what are their main obstacles. A more qualitative aspect covers the rationales or motivations behind financial decisions to save, borrow, invest… In Mexico, the sample covered 185 households from Mexico City, a town in Puebla and a rural community in Oaxaca, with an average monthly income of USD66.

As a development bank, BANSEFI has been sponsoring such survey as part of its missions to promote financial inclusion in the country and migrate people into a bank account.

The main conclusions of Diarios financieros are the following:

​Non-financial services have soothe households' fi​​nancial bu​rde​n

​Bad quality services such as non-reliable supply of water or insecurity of public transports turn into additional costs for the families who took part to the study. For instance, as public transportation in the city of Mexico isn't safe nor reliable, families – and women especially – have to take a taxi. When there is no water in a community for days, money goes into buying bottled water. These expenses reduce families' available income. Improving public services could have a huge impact on households' finances.

Besides, the lack of connectivity in poor areas, such as in Oaxaca, limits opportunities of financial inclusion.
Researchers underlined that a dirt road is the only connecting the place of investigation to the closest city, an hour away. Moreover, there is no telephone network. The lack of basic infrastructures in poor and indigenous part of the country makes it hard for this population to get out of poverty.
Remoted areas do not have access to financial services; but the entrance of new operators in the market must still be cautious of protecting consumers. 
In Puebl​a, a cooperative plays an important role, as the unique provider of savings banks services, with safe deposits. However, in Oaxaca, members of the community lost their money after placing it in a bank that went bankrupt. By the end of the study, another bank was created, which wasn't endorsed by any regulatory institution… Regulation is vital, and the government should foster its support to consumers' protection.
Sporadic and incomplete payments from employers worsen households' instability. 
In urban areas, studied households experience difficulties to be paid on time, or at all. Without information or access to resources helping them to face such situations, families feel helpless in addition to being impoverished.

Interviewed households appreciate being able to build their financial capacity when information is concise, practical and straightforward

​Families would like to be trained to be able to withdraw money at ATM, instead of abstract guides.

Within the sample, two thirds of the surveyed households are benefiting from Prospera, a government social programme sponsoring families of low income whose children are in age of going to school, under the conditions that children do not miss school that the family regularly goes to health centres and also providing nutrition support. The study shows the importance of the programme Prospera to support the community as the promise of a stable income.

For such households, Prospera averagely represents 12% of their income (up to 44% in Oaxaca). Such amount is directly wired on households' account, which in the city of Mexico, they can withdraw at ATMs and thus consider as deposits and withdrawals from the BANSEFI account. In Puebla and Oaxaca, families receive the money cash and thus do not consider such money as deposit. Indeed, in such areas, households didn't know they could execute other financial transactions. Yet, although they are not traditional savings tools, the spread of credits to clients or asking a loan from friends or family are important behaviours to maintain social and financial relationships.