The use of mobile money increases in Central America, Panama and the Dominican Republic

Madrid. The use of digital financial services has seen rapid growth in Central America, Panama and the Dominican Republic over the past five years, with the percentage of adults in the region who own mobile money accounts doubling from four percent to eight percent among 2017 and 2021, according to a new study by the Inter-American Development Bank (IDB).

Digital platforms facilitate savings, improve security, speed, and reduce costs associated with domestic payments and international remittances, which is especially relevant in the region, where the most vulnerable households depend on remittances, according to the economic report. of the IDB ‘Towards greater financial inclusion for development’.

The study highlights the number of mobile money and digital payments account holders, which represents progress in financial inclusion of companies and households in the region and a gateway to other financial products and services, with less dependence on banking infrastructure. traditional.

Challenges

Despite progress, the region faces challenges in closing gaps with other parts of the world in terms of adoption of digital financial tools, as well as other policies that positively influence financial inclusion.

These include the development of a national financial inclusion strategy, financial education, promoting competition, and improving the recovery rate of loans in the event of non-payment.

Other challenges are access to debtors’ credit information, the administrative efficiency of financial institutions through the use of correspondents and digital payment platforms.

“It is key to promote policies to boost the availability and access to financial services that allow companies to grow and households to invest in economic activities, education and health,” commented Tomás Bermúdez, general manager of the IDB for the region of Central America, Mexico. , Panama, Dominican Republic and Haiti.

In this region, on average, 35 percent of companies report being financially constrained, more frequently than the average in Latin America (30 percent). For its part, in households, the region has an average level of financial inclusion estimated at 42% of the average for high-income OECD countries.