Low Access to Financial Products in El Salvador, Guatemala, and Honduras: A Study by Americas Market Intelligence and Mastercard

In El Salvador, Guatemala and Honduras, only one in four banked adults has a debit or credit card, further emphasizing the obstacles to accessing the financial system within the region, indicates a recent study by Americas Market Intelligence (AMI). and Mastercard.

It also details that between 2020 and 2023 the majority of Latin Americans obtained access to more basic financial products, but 21% still depend exclusively on cash and continue to be excluded.
Given these findings, the company Paymentology, the global issuer-processor of cards and payments, announced this week an agreement with Mastercard to promote financial inclusion in these three countries of the Northern Triangle of Central America.

It may interest you: Out of every 100 Salvadorans, 9 have a credit card

In this sense, Mastercard, which is a founding member of the Alliance for Central America (AAC), has committed to incorporate 5 million people and 1 million micro, small and medium-sized enterprises (MSMEs) into the digital economy, including 300,000 companies run by women, within a period of five years, according to information released by the companies.

The company seeks to support the construction of an inclusive digital economy in which all people, anywhere, can benefit from the technological revolution and make the most of it, they say.

“Our alliance with Paymentology will help build a more robust and inclusive financial ecosystem in the northern sector of Central America, providing the technology, expert support and efficient processes that new financial institutions and fintechs require to launch and grow,” he explained. Thiago Dias, Senior Vice President of Fintechs, Enablers and Crypto at Mastercard Latin America and the Caribbean.

In the case of El Salvador, according to a survey carried out by the Center for Citizen Studies (CEC) of the Francisco Gavidia University (UFG), released in May of this year, 86.1% of the population responded that they do not have credit cards or debit. Only 9.1% indicated that they have one; 3.5% said two; and the 1% who own three.

The survey also revealed that of those who have a credit card, 64.6% are up to date with their payments; 22.9% hardly use it; 7.4% make the minimum payment; and 2.9% have it “run over”.

Also read: Difficult economic outlook for the rest of the year: UFG

According to the latest report from the Salvadoran Banking Association (Abansa), with data as of June, the country’s banks have granted loans to Salvadorans totaling $15.946 million.

Of that amount, most of the funds have been for consumption, which is generally done through a credit card. According to the report, $5,286 million (33%) have gone to consumption; another $2,374 million (15%) to the commerce sector, while some $1,301 million (8%) have gone to the service sector.

They will offer practical solutions
Given the difficulties that many users have accessing financial products in Central American countries, Paymentology and Mastercard affirm that they will work closely with financial institutions, fintech companies and telecommunications companies to encourage and enable them to offer financial tools and solutions accessible to individuals and owners of unbanked or underbanked SMEs.

“Our goal is to ensure that more Central Americans have access to innovative, secure, and practical financial solutions so they can connect to the digital economy and improve their lives,” Días added.

As they explain, these solutions include digital and physical debit or prepaid Mastercard card programs and cards for micro-enterprises tailored to their specific needs.

In addition, they will offer consumers and businesses “access to robust security features and the ability to make and receive digital payments for various purposes, such as social benefits, remittances (including person-to-person transfers), point-of-sale purchases, financing of small businesses, and much more”, indicate the companies.