Overwhelming Majority of Adults (93%) Report Having Financial Products, Signifying Steady Growth in Financial Inclusion
Financial Inclusion
The recently released annual financial inclusion report by Banca de las Oportunidades provides valuable insights into the accessibility and utilization of financial services among Colombians.
The report’s data, collected up until the end of last year, reveals interesting trends in savings, transactions, and credit services within the financial system.
One notable finding from the report is the steady growth in financial inclusion, with an impressive 93.3% of adults having at least one financial product with an institution.
This statistic showcases the increasing availability and uptake of financial services across the country, indicating a positive trajectory towards greater financial inclusion for the population.
However, it’s important to note that the report also highlights a slight decline in the percentage of adults accessing credit between 2018 and 2022.
In 2018, approximately 40.1% of adults reported having some form of loan, whereas in 2022, this figure dropped to 36.2%.
This observation suggests a nuanced shift in borrowing patterns or preferences among the population, which could be influenced by various factors such as economic conditions, changing financial needs, or evolving borrowing habits.
By analyzing these figures and trends, policymakers and financial institutions can gain valuable insights into the effectiveness of existing financial inclusion strategies and identify areas for improvement.
The report serves as a vital tool for assessing the progress made in expanding financial access and understanding the evolving dynamics of the financial landscape in Colombia.
The progress in financial inclusion among the elderly population in Colombia is evident when comparing the figures from 2021 and 2022.
In 2021, 90.5% of elderly individuals reported having at least one financial product from the financial system.
However, the latest data indicates a significant improvement, with 93.3% of the elderly now having access to financial products. This increase reflects the efforts made to enhance financial inclusivity and cater to the specific needs of this demographic.
The report reveals that the most robust aspect of financial inclusion in the country is access to deposits. This indicates a strong culture of savings and a high level of confidence in the banking system among Colombians.
The availability of deposit services has played a crucial role in promoting financial stability and providing individuals with a secure place to safeguard their funds.
The report’s findings also highlight a noteworthy statistic: the 93.3% financial inclusion rate corresponds to approximately 34.7 million adults in the country.
It is worth emphasizing that within this number, around 1.2 million adults accessed a financial product for the first time.
This achievement underscores the positive impact of ongoing efforts to expand financial access and empower individuals with the tools to manage their finances effectively.
However, despite significant progress, there is still work to be done. The report indicates that 7.7% of adults, equivalent to approximately 3 million individuals, remain unattended in terms of their financing needs.
This represents a considerable challenge that requires continued dedication and innovation to ensure that these underserved populations can access the financial services they require.
Redoubling efforts to address this gap will contribute to further advancing financial inclusion and improving the overall well-being of these individuals and their communities.
Paola Arias, the director of Banking of the Opportunities, acknowledges this challenge and emphasizes the importance of reaching those 3 million Colombians who are currently unattended. By acknowledging and addressing this task, the financial sector can make targeted efforts to extend its services and support to those who have yet to benefit from formal financial products and services.
Transactional and deposit services play a significant role in the financial penetration landscape in Colombia. The report reveals that 91.3% of adults had engaged with these types of services, indicating a high level of adoption and utilization.
This percentage encompasses individuals who held savings accounts, made low-amount deposits, invested in Certificates of Deposit (CDTs), or had checking accounts.
These services provide a solid foundation for individuals to manage their finances, save, and conduct transactions securely.
On the other hand, credit services demonstrate a lower level of penetration when compared to transactional and deposit services.
Only 36.2% of the adult population in Colombia reported having some form of credit, such as current credits, consumer loans, credit cards (TC), microcredit, or housing loans. This statistic suggests that there is room for growth and improvement in expanding access to credit among the population.
Despite the relatively lower penetration rate for credit, it is important to note the positive trend of financial inclusion in Colombia.
The country has managed to establish a trajectory of expansion, as evidenced by the increasing number of individuals accessing financial products and services.
This progress signifies a growing awareness and acceptance of the benefits that formal financial services can bring to individuals and the broader economy.
By continuing to promote and enhance financial inclusion initiatives, Colombia can build upon its current achievements and further expand access to credit and other financial products.
This will enable more individuals to tap into opportunities for investment, entrepreneurship, and economic growth.
Through targeted efforts and strategic partnerships, the financial sector can work towards bridging the gap between the current levels of financial inclusion and the potential for even greater penetration in the future.
The access indicator clearly illustrates a significant increase in financial access over the past five years, rising from 75.2% to over 92%.
This notable growth aligns with the increasing access to deposit and transaction services, which has been consistently expanding since 2017.
Notably, even during the challenging years of the pandemic in 2020 and 2021, the access rate experienced a yearly growth of more than 5 percentage points.
These statistics highlight the effectiveness of efforts aimed at improving financial inclusion in Colombia. The continuous growth in access to financial services demonstrates the increasing awareness and utilization of formal financial products among the population.
It signifies the success of initiatives that have facilitated greater financial inclusion, providing individuals with the opportunity to engage in secure and convenient transactions, savings, and other essential financial activities.
The substantial growth in access to financial services during the pandemic years indicates the resilience of the financial system and its ability to adapt to challenging circumstances.
It also underscores the importance of financial services in supporting individuals and businesses during times of crisis, as people increasingly sought out formal channels to manage their finances and conduct transactions.
These positive trends in access to financial services showcase the progress made in expanding financial inclusion in Colombia. However, there is still room for further improvement and the pursuit of even higher levels of access.
By building upon the achievements of recent years and maintaining a focus on inclusive financial policies, Colombia can continue to enhance financial access, empower individuals economically, and drive sustainable economic growth.
The data reveals that the indicator for credit services in Colombia has been experiencing a downward trend even before the onset of the pandemic. In 2018, the percentage of Colombian adults with credit services was 40%, which then declined to 36.2% in 2019.
This decline continued throughout 2020 and 2021, indicating a sustained decrease in the number of individuals accessing credit services.
However, there was a slight rebound in credit services in the most recent year, bringing the indicator back to 36.2%. Despite this improvement, it is important to note that the current level of credit access is still significantly lower than the pre-COVID records.
The decline in credit services can be attributed to various factors, including economic uncertainties, reduced lending activities by financial institutions, and cautious borrowing behavior by individuals and businesses.
The pandemic likely exacerbated these trends, as the economic impact and uncertainty led to a more conservative approach to credit.
While the slight rebound in credit services is a positive sign, it indicates that there is still work to be done to restore credit access to pre-pandemic levels.
Encouraging the availability of credit and facilitating responsible borrowing practices will be crucial in supporting economic recovery and providing individuals and businesses with the financial resources they need to thrive.
Efforts to stimulate credit demand, improve creditworthiness assessment processes, and promote financial education can all contribute to enhancing credit access in Colombia.
By addressing the underlying factors contributing to the decline in credit services and implementing targeted measures, the country can work towards revitalizing credit access and supporting economic growth.
