Argentina's Remarkable Leap in Financial Inclusion: Over 100 Growth in Account Ownership

Argentina's Financial Inclusion Surge: Over 100 Growth in Account Ownership

In recent years, Argentina has witnessed a remarkable growth in financial inclusion. According to the Global Findex database from the World Bank, there has been more than a 100 increase in bank account ownership between 2011 and 2021. Notably, this development reversed the ger gap, with women now holding more accounts than men by 4 percentage points in 2021. The COVID-19 crisis further accelerated financial inclusion through the opening of new accounts and an expansion of digital payments.

Argentina is one of the top 25 countries globally that have experienced the most significant growth in financial inclusion over the last decade. This transformation saw adults with bank accounts increase from a lower level to more than double their number within ten years Source: World Bank, Global Findex.

Digital account usage and payment methods soared by over 60 in the last three years alone, marking Argentina's lowest levels of account inactivity compared to other Latin American economies. This digital leap has also facilitated the adoption of innovative channels for delivering financial products.

The Argentine landscape is diverse, with a plethora of financial service providers including banks and fintech companies, which together have driven this surge. The country boasts one of the highest concentrations of fintech firms in Latin America excluding Brazil, Mexico, and Colombia. Moreover, it has implemented an immediate payment scheme called Transferencias 3.0 that enhances interoperability across different platforms.

Argentina's connectivity levels are impressive: over 93 of adults have access to internet connections, and the national digital identification system covers nearly every citizen at a rate of 98. This system allows for seamless authentication through extensive databases contning biometric information.

Regulatory frameworks in Argentina are flexible. They enable remote account opening using only a digital identity document on mobile phones. These regulations also support initiatives tlored to specific population segments, like simplified accounts med at the low-income demographic. Additionally, government initiatives such as digitizing public payments and promoting QR code usage for payments have facilitated access and use of deposit accounts along with electronic payment methods.

While Argentina has made significant strides in financial inclusion, there is potential for further development in certn areas:

1 Only 45 of private sector workers receive their salaries through financial institutions compared to 82 of public sector employees.

2 Just 26 make payments for basic services using an account and only 45 use digital methods e.g., QR codes or online transactions in retl stores.

Furthermore, a concerning figure is that 33 of adults find it very challenging to rse funds during emergencies. Only 13 would consider taking out loans, while the utilization of savings for such purposes stands at just 10.

In response to these insights, Argentina is currently working on identifying evidence-based needs and challenges faced by different population segments in accessing and utilizing financial services. This process inform the design of a new national strategy that will address these issues effectively.

The World Bank supports this eavor with its tools for creating an action plan and monitoring system, which ensure the effectiveness and coordination of government efforts related to financial inclusion ENIF. For continuity and improvement, it is crucial to integrate these tools into future policy frameworks.

In , Argentina's journey towards financial inclusion demonstrates significant progress. By leveraging innovative technology and regulatory flexibility, the country has achieved a notable increase in account ownership rates while reducing ger disparities. The current challenges underscore the importance of ongoing efforts in ensuring that all sectors of society can benefit from improved financial access, thus supporting an inclusive economic recovery and providing tools to manage unforeseen events effectively.

Veronica Trujillo

Financial Sector Specialist

Fiorella Risso Brandon

Senior Financial Sector Consultant
This article is reproduced from: https://blogs.worldbank.org/en/psd/how-did-argentina-increase-number-bank-accounts-more-100

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