Pandemic Draws More Latin American Poor into the Banking System

Pandemic Draws More Latin American Poor into the Banking¹ System

Sonia Fierro sells books for children on the streets of Bogota, Colombia. She earns just enough money to pay for her meals, housing and other living expenses. But she has never earned enough for the monthly fees that are required for a bank account.

When the COVID-19 public health crisis² left her with little money, Fierro found she could receive government aid, but needed a bank account. With her daughter's help, she began using a banking app called Daviplata. It lets her and other users receive and withdraw money, and make payments.

"It's the best thing they could have done because it's easy and doesn't cost anything," she said.

Across Latin America, the COVID-19 crisis has brought an unlikely, but hopeful development: Millions of people who never used traditional banks have joined the financial system because of online banking services. Governments use these services to give out emergency assistance and, as a result, the number of people who use banks has increased.

"To be able to store money, save money and pay with money is actually a really important part of being lifted out of poverty," said Mahesh Uttamchandani. He is a financial expert at the World Bank. He noted³ that being able to save money makes a person better able to survive economic shocks.

Fourteen countries in Latin America have used online financial tools to give out aid money, says the Better than Cash Alliance⁴. The group is a coalition⁵ of governments and international organizations that believe internet banking will reduce poverty.

In Colombia, at least 1.6 million people who never had a bank account have joined the nation's financial system since April. Eighty percent use internet systems like DaviPlata, notes Luis Alberto Rodríguez, who directs the Department of National Planning. Officials say 85.9 percent of Colombians now use some banking system, a number the government did not expect to reach until 2022.

Colombia's success is mostly because the government quickly identified citizens who could receive aid, but did not have a bank account. The country is also home to several banking apps. DaviPlata was created in 2012 by Davivienda, the country's third-largest bank. Users do not have to pay monthly fees or have a set amount of money in their account.

Movii, another application, was launched 18 months ago with 300,000 users. By August, it had more than 1 million users, mostly those who lived in poverty.

"For banks, it's a bother to tend to the poor," said Movii co-founder Hernando Rubio. He said that most banks are not interested in servicing the poor, but his company was "created specifically for this."

Latin American countries have spent about 4 percent of their gross⁶ domestic⁷ product (GDP) on lower taxes and other measures to limit the severity of the economic crisis. The area's GDP will fall by 9 percent by the end of 2020. Poverty is at levels not seen for 15 years, reports the United Nations Economic Commission⁸ for Latin America and the Caribbean.

As Brazil struggled to deal with the COVID-19 health crisis, the government offered $217 a month to most citizens. Those who asked for the aid were given online bank accounts to get the money. Of the nearly 100 million new accounts, 40 percent went to those who had never before used a bank.

It has been more difficult in other countries, like Peru. About 60 percent of Peruvians do not use banks and the government has struggled to give out emergency aid. Most people had to go to a bank to get their money. In some places, government officials had to drive house to house.

"We didn't have a DaviPlata who wanted to take this problem on," said Liliana Casafranca. She serves as an adviser⁹ at the Bank of the Nation, a large bank in Peru.

Former President Martin Vizcarra has set a goal of getting every Peruvian over the age of 18 a bank account by 2021. Officials hope to open one million new accounts by the end of the year.

Words in This Story

expense – n. the cost of something

fee – n. a specific cost tied to an action

bank account – n. a service from a financial institution

app – n. an application used on a smart phone or tablet

bother – v. to take an interest in

tend - v. to usually do or make an effort

gross domestic product - n. the full amount of productivity of a nation

1 banking   

n.银行业，银行学，金融业

参考例句：

• John is launching his son on a career in banking.约翰打算让儿子在银行界谋一个新职位。
• He possesses an extensive knowledge of banking.他具有广博的银行业务知识。

2 crisis   

n.危机，危急关头，决定性时刻，关键阶段

参考例句：

• He had proved that he could be relied on in a crisis.他已表明，在紧要关头他是可以信赖的。
• The topic today centers about the crisis in the Middle East.今天课题的中心是中东危机。

3 noted   

adj.著名的，知名的

参考例句：

• The local hotel is noted for its good table.当地的那家酒店以餐食精美而著称。
• Jim is noted for arriving late for work.吉姆上班迟到出了名。

4 alliance   

n.同盟，同盟国，结盟，联姻

参考例句：

• China will not enter into alliance with any big power.中国不同任何大国结盟。
• The new alliance was very much in evidence.新的联盟上星期很引人注目。

5 coalition   

n.结合体，同盟，结合，联合

参考例句：

• The several parties formed a coalition.这几个政党组成了政治联盟。
• Coalition forces take great care to avoid civilian casualties.联盟军队竭尽全力避免造成平民伤亡。

6 gross   

adj.全部的，粗俗的，肥胖的；vt.获得...总收入

参考例句：

• The gross weight of the box of chocolates is 500 grams.那盒巧克力的全部重量是500克。
• I consider this a gross oversight on your part.我把这件事看作是你的一大疏忽。

7 domestic   

adj.家里的，国内的，本国的；n.家仆，佣人

参考例句：

• This is domestic news.这是国内新闻。
• She does the domestic affairs every day.她每天都忙家务。

8 commission   

n.委托，授权，委员会，拥金，回扣，委任状

参考例句：

• The salesman can get commission on everything he sells.这个售货员能得到所售每件货物的佣金。
• The commission is made up of five people,including two women.委员会由五人组成，其中包括两名妇女。

9 adviser   

n.劝告者，顾问

参考例句：

• They employed me as an adviser.他们聘请我当顾问。
• Our department has engaged a foreign teacher as phonetic adviser.我们系已经聘请了一位外籍老师作为语音顾问。