PowerPoint presentations from Fundación Capital's South-South Knowledge Exchange Forum, organized with support from IFAD "Leveraging Opportunities to Encourage Financial Inclusion"

1. Una política para promover el acceso a servicios financieros buscando equidad social

2. What is Banca de las Oportunidades (BdO) ?
It is the national financial inclusion policy of the
government of Colombia, established in 2006, to
promote access to financial services, with a special
emphasis on the poorest. It works through innovative
public – private alliances and pro-market interventions
to ensure a profitable and sustainable supply.
To comply with this mandate, BdO serves as:
1) Facilitator
2) Promoter of change
3) Leader and articulator
4) Capacity Builder
Una política para promover el acceso a servicios financieros buscando equidad social

3. How does it work?
Regulatory Framework: Create an adequate
environment and promote required reforms
Contributes to the rapprochement b/w
Supply and Demand of financial services
Gives Support to BdO´s network: Incentives
(monetary and in kind) to the supply of financial
services to extend their geographic outreach,
develop adequate products and adopt new
methodologies
Una política para promover el acceso a servicios financieros buscando equidad social

4. •Institutional
Strengthening (to
NGO and Coop.)
•Product Design •Bank Agents
and new •M-banking
methodologies •Incentives for F
to increase
outreach
•Microcredit
•Village banking/
Group Lending
•Self Help Groups /
Savings and Loans
Groups
•Microsavings
•Microinsurance •Financial Eduaction
•Microcredit Programs
•Savings Culture
Program (with
Fundacion Capital)
Una política para promover el acceso a servicios financieros buscando equidad social

5. •Institutional
Strengthening (to
NGO and Coop.)
•Product Design •Bank Agents
and new •M-banking
methodologies •Incentives for F
to increase
outreach
•Microcredit
•Village banking/
Group Lending
•Self Help Groups /
Savings and Loans
Groups
•Microsavings
•Microinsurance •Financial Eduaction
•Microcredit Programs
•Savings Culture
Program (with
Fundacion Capital)
Una política para promover el acceso a servicios financieros buscando equidad social

6. Propitiating Reforms to the Regulatory
Framework
 Promotion of Agent Banking (Corresponsales No
Bancarios)
 Development of Electronic Accounts/ Small-Amount
Savings Accounts : Product geared for low income
clients, with lower barriers, costs and simplified
procedures
 Regulatory framework for the implementation of M-
banking
Una política para promover el acceso a servicios financieros buscando equidad social

7. •Institutional
Strengthening (to
NGO and Coop.)
•Product Design •Bank Agents
and new •M-banking
methodologies •Incentives for F
to increase
outreach
•Microcredit
•Village banking/
Group Lending
•Self Help Groups /
Savings and Loans
Groups
•Microsavings
•Microinsurance •Financial Eduaction
•Microcredit Programs
•Savings Culture
Program (with
Fundacion Capital)
Una política para promover el acceso a servicios financieros buscando equidad social

8. Increase Geographical Outreach
Non Bank Agent (Agent Banking): Low
cost distribution channel, for financial
institutions to offer their services through
commercial establishments which allows them
to extend outreach and facilitate clients to do
their transactions closer to home
BdO Contribution:
 Development of regulatory framework,
required for its implementation in Colombia
 Authorization to open savings accounts at
NBA
 Incentive (Subsidy) for financial institutions
to open NBA in municipalities that didn´t
have financial presence: 187 CNB
 Incentive (Co-finance) to banks, to open
NBA in marginal neighborhoods
Una política para promover el acceso a servicios financieros buscando equidad social

9. MUNICIPALITIES WITHOUT
FINANCIAL INSTITUTIONS
PRESENCE
June 2006: 309
Now: 9
Non bank agents (NBA):
 NBA opened with BdO incentives: 209
Total number on NBA in Colombia: 23.623
Total number of financial institutions with NBA: 17
Number of transactions done through NBA: 115 MILLONES
Value of transaction done through NBA: US$13 BILLONES
* Data from June 2007 to April 2011
Una política para promover el acceso a servicios financieros buscando equidad social

10. Increase Geographical Outreach
Co-financiation: temporary and diminishing subsidies for
specialized microcredit institutions to extend their outreach to
municipalities of less than 50.000 inhabitants, where there was
no presence.
Type # of Municip. Value
of Inst. (in US $ M)
CNB 187 $3,2
ONG 104 $0,88
CFC 15 $0,12
Coop 18 $0,4
Incentives given to 27
institutions, to extend
their outreach with 324
new POS in 311
municipalities
Una política para promover el acceso a servicios financieros buscando equidad social

11. New Distribution channels
M-banking: Channel and mean to reach the “Unbanked”. BdO
has worked on project to set an enabling environment for the
provision of m-banking services with the objective of increasing
access to banking services for the poor, taking advantage of the
technological advances.
Achievements:
i) Diagnosis of legal, regulatory and institutional framework and
identification of best practices that allow its implementation in the
country.
ii) Detailed study of legal and regulatory reforms required, to be discussed
with MPF, MINCO and the Financial Superintendence .
iii) Consultancy to review technological matters.
iv) Facilitator hired to articulate and foster the participation of key
stakeholders (MNO, banks, technology providers, commerce and users)
and identify the actions to overcome the main bottlenecks. Disclosure of
results and motivation for the private sector to implement it.
v) Creation of an Intergovernmental committee
• Financial Superintendence, Min. Public Finance, Telco Regulation Comission,
National Planning Dept, Min. of Comm, and BdO
Una política para promover el acceso a servicios financieros buscando equidad social

12. •Institutional
Strengthening (to
NGO and Coop.)
•Product Design •Bank Agents
and new •M-banking
methodologies •Incentives for F
to increase
outreach
•Microsavings
•Microinsurance
•Microcredit
•Village banking/ •Financial Eduaction
Group Lending Programs
•Self Help Groups / •Savings Culture
Savings and Loans Program (with
Groups Fundacion Capital)
Una política para promover el acceso a servicios financieros buscando equidad social

13. Development of adequate products
Microsavings: Savings account for
CCT beneficiaries
Opening of savings accounts for all
Familias en Accion (Conditional Cash
Transfer Program) beneficiaries (about 2,5
million) to receive their subsidies’ payments,
in a fast, timely and efficient way, at a low
cost.
Important advances to achieve it:
Non Bank Agents: Full Financial
Coverage of all municipalities
Design of special savings account:
Full fledge, but simplified procedures
and no frills
Una política para promover el acceso a servicios financieros buscando equidad social

14. Development of adequate products
Microsavings: Promotion of Savings Culture for CCT benefiaries
that opened accounts.
(Project with Fundación Capital)
Objectives:
Financial Inclusion: Savings account as gateway to have access to
other services of the formal sector
Transformation of informal savings to formal ones
Increase savings and promote assets accumulation
Facilitate financial transactions through efficient and secure means.
Project Components
•Monetary incentive
•Financial Education
•Impact Evaluation
Una política para promover el acceso a servicios financieros buscando equidad social

15. Financial Education: Programs to improve capacity of lowest
income population to manage their personal finances, providing
complete information about the benefits and principles of using
financial services (savings, credit, microinsurance) and basic
concepts such as budget and financial planning
 BdO - Microfinance Opportunities: Bring to Colombia the Financial
Education Global Program
 Program to promote Savings Culture among CCT recipients:
Financial Education to enhance savings habits and potentiate use
of other financial services among CCT recipients and population in
extreme poverty.
 Project with Central Bank (Banco de la República) to include
financial education on school pensum
 Design strategies for massive outreach (radio, TV cell phone) to
reach more people at low costs.
Una política para promover el acceso a servicios financieros buscando equidad social

16. Development of adequate products
Microinsurance: Promote the development and use of adequate
instruments to mitigate the adverse effect of economic shocks, natural
disasters and emergencies, for the lowest income population.
 Demand study to identify the needs of the
population in extreme poverty and
determine the elements to design an
adequate microinsurance that suits them,
recommending also the best distribution
channels for its implementation
 Pilot project to give life and funerary
microinsurances to 50.000 families in
extreme poverty (Red Unidos): Currently
in implementation
Una política para promover el acceso a servicios financieros buscando equidad social

17. Development of adequate products
Microinsurance: Next steps
 Pilot Project to assure 408.000
Red Unidosbeneficiaries (lowest
income population of the country),
for future expansion to 1.5 M
 Financial Education program for
these families to understand the
importance and benefits of a
microinsurance, and use them.
 Development of specialized
microsinsurance products: For
crops, property, against disasters
Una política para promover el acceso a servicios financieros buscando equidad social

18. Access for other segments
Specialized Microcredit Methodology: Technical Assistance
to financial institutions to implement methodology which
facilitates access to credit for micro entrepreneurs. With
support from USAID – MIDAS, TA was given to the following
institutions:
 4 Banks: Bancolombia, Banco
Agrario, BCSC, Banco de Bogotá
- Megabanco.
 5 Cooperatives: Coopcentral,
Comultrasan, Cooprocemva,
Ultrahuilca, Credicoop.
 4 NGOs: Fundación Mundo Mujer
Popayán, Contactar, Agape,
Opportunity Internacional.
 3 FC: Finamérica, Compartir,
Giros y Finanzas.
Una política para promover el acceso a servicios financieros buscando equidad social

19. •Institutional
Strengthening (to
NGO and Coop.)
•Product Design •Bank Agents
and new •M-banking
methodologies •Incentives for F
to increase
outreach
•Microcredit
•Village banking/
Group Lending
•Self Help Groups /
Savings and Loans
Groups
•Microsavings
•Microinsurance •Financial Eduaction
•Microcredit Programs
•Savings Culture
Program (with
Fundacion Capital)
Una política para promover el acceso a servicios financieros buscando equidad social

20. Access for the poorest (BOP)
Village Banking: Methodology that allows to extend savings
and credit services for vulnerable population, giving access to
new segments in difficult to access areas.
BO: Technical Assistance for Intermediaries
Expected Results:
Implementation of Village Banking in at least 5 institutions
40.000 clients participating
20% clients - unbanked
Una política para promover el acceso a servicios financieros buscando equidad social

21. Access for the poorest (BOP)
Self Help Groups: Promotion of savings culture and access to
basic financial services for the population in extreme poverty, in
remote areas of the country.
BO: Technical Assistance for implementation of pilot project
Results:
Promotion of savings culture
Practical Financial Education
Construction of social capital
Social Cohesion
Concepto Number
Villages 34
Groups 434
Total Members 6.873
Total Assets US $460.000
Values of Credits US $100.000
Av. Assets / member US $60
Number of credits 1.650
Average credit size US $50
Una política para promover el acceso a servicios financieros buscando equidad social

22. Access for other segments
Institutional Strengthening: BdO
hired two renown technical
assistance firms (WOCCU and
Planet Finance) to give integral
strengthening on different areas
(financial, commercial, operative,
technological, etc) to cooperatives
and NGO in Colombia, to improve
their performance and assure their
sustainability.
 Technical Assistance NGO:
 TA: PLANET FINANCE)
 To 6 NGOs
 Technical Assistance
Cooperatives:
 TA: WOCCU
 To 9 cooperatives
Una política para promover el acceso a servicios financieros buscando equidad social

23. RESULTS
Una política para promover el acceso a servicios financieros buscando equidad social

24. MUNICIPALITIES WITHOUT
FINANCIAL INSTITUTIONS
PRESENCE
June 2006: 309
Now: 9
Non bank agents (NBA):
 NBA opened with BdO incentives: 209
Total number on NBA in Colombia: 23.629
Total number of financial institutions with NBA: 17
Number of transactions done through NBA: 115 MILLONES
Value of transaction done through NBA: US$12,7 BILLONES
* Data from June 2007 to April 2012
Una política para promover el acceso a servicios financieros buscando equidad social

25. Access to Credit
Microcredit Disbursements
9,7 MILLIONS OF CREDITS
FOR US $ 16 BILLIONS
Microentrepreneurs that have had access
to credit for the first time:
TOTAL: 3 MILLIONS
August 2006 – April 2012
Una política para promover el acceso a servicios financieros buscando equidad social

26. Bancarization
Bancarización de la población
Mayor de 18 años en Colombia
July 2006: 47%
Dec 2011 : 64,6%
Una política para promover el acceso a servicios financieros buscando equidad social

27. Una política para promover el acceso a servicios financieros buscando equidad social

28.  Development of new distribution channels and
products
 Agent Banking
 Mobile Banking
 Microsavings
 Microinsurance
 Rapprochement between supply and demand
 Promotion of savings culture
 Financial Education
Una política para promover el acceso a servicios financieros buscando equidad social

29. Access to Credit
Microcredit Loan
Outstanding balance
July 2002: US $ 395 millions
July 2006: US $ 1,9 billions
Dec 2011: US $ 5,6 billions
Una política para promover el acceso a servicios financieros buscando equidad social