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Citibanamex: Inclusive By Design

By Ernesto Torres Cantu and Robert Annibale

 

Kim Hogan, Skoll Foundation

Citigroup makes strides towards systems change in the financial inclusion space by investing $1 billion in Citibanamex as the government of Mexico launches its National Financial Inclusion Strategy. The announcement puts action behind our discussion, at last year’s Skoll World Forum, titled Technology’s Role in Driving Social Progress Continues to Grow.

Citi’s recently-announced US$1 billion investment in Citibanamex is a significant demonstration of the bank’s ongoing commitment to Mexico, which will enable substantial enhancements and expansions of technology, platforms, and service offerings designed to meet the evolving needs of our customers. But this announcement also includes a commitment which embodies our alignment with Mexico on one of its most important goals: the creation of a business unit dedicated to Financial Inclusion.

Despite recent and encouraging progress highlighted by the 2012 and 2015 Financial Inclusion National Surveys—such as eight million adults in Mexico opening a bank account for the first time—there are still significant challenges to achieving financial inclusion in the country. The 2015 Financial Inclusion National Survey reveals that there are approximately 38 million adults living in Mexico who do not have a bank account. That’s roughly 55 percent of Mexico’s adult population—a group comparable in size to the population of Canada—that lacks access to mainstream financial services. In addition, only 9.5 percent of adults are using mobile banking, even though 75 percent have a mobile phone. And the majority of adults surveyed did not have the resources they needed in order to make informed decisions about the financial products and services that are available to them.

As part of a series of financial reform measures approved by the Mexican government, progressive regulations have led to successful innovations such as simplified accounts with proportional customer file requirements, and new mobile and remote channels which expand the reach of financial services beyond traditional bank branches. But while these developments have laid the foundation for an expansion of financial access like never before, there is still a long way to go.

The government of Mexico has taken on this challenge with the recent launch of its National Financial Inclusion Strategy: a policy initiative which seeks to link the efforts of the public and private sectors and enable progress in six key areas: Financial & Economic Education (FEE), Inclusive Technologies and Innovation, Financial Infrastructure in Underserved Areas, Universal Access, Consumer Protection, and Data Generation and Metrics. Through the coordinated advancement of these six pillars, according to President Enrique Peña Nieto, this strategy “enables families to be less vulnerable and fragile, and have less of a risk of losing their assets, or possibly falling into poverty”.

This Citibanamex announcement represents an alignment with Mexico’s national plan, and the focused expansion of work that we have been doing for over 10 years—both at the local level through the various Citibanamex touch points, and globally through our Citi Inclusive Finance international unit which works with Citi businesses in over 40 countries around the world. The strategy builds upon the bank’s pioneering efforts, which include the development of a network of over 20,000 In-Store-Branches and 40,000 Points of Sale devices across the country; the joint venture with America Movil to create “Transfer”, a mobile payments operator; the Transfer Banamex account, which has added more than 4.7 million active clients, most of them new to the banking system; and the financial education programs that have reached more than 13 million people in the country.

Citibanamex also has a history of working closely with the Mexican government to deliver social program payments into debit cards, creating efficiencies and substituting the use of cash, and has been serving the local microfinance industry for over a decade, having connected for the first time the leading microfinance institutions in Mexico to the local capital markets to finance the expansion of their portfolios of working capital loans to micro entrepreneurs.

Even though Citibanamex Financial Inclusion is a new unit, the bank’s work in this area is not. This newly created Citibanamex Financial Inclusion area will leverage synergies between its businesses in Mexico and will tap into Citi’s global expertise and experience in order to deliver the best of Mexico and the best of the world—both in expanding access to safe, affordable financial services, as well as in developing financial capability programs that help empower households to build a more secure financial future.

We agree with the Mexican government that inclusion is good business—and we are fully embracing those values in this new chapter for Citibanamex, where inclusion is built in by design.

 

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