In a country where financial access has significantly improved yet disparities persist, H.M. Queen Máxima of the Netherlands, the United Nations Secretary-General’s Special Advocate for Inclusive Finance for Development (UNSGSA), visited Colombia to spotlight the nation's achievements and support its efforts to address opportunities and challenges ahead in financial inclusion and financial health.
From 25-28 February 2024, the Special Advocate's mission underlined a commitment to expand diverse financial services available to all Colombians. Despite a notable increase in bank account ownership among adults from 39% in 2011 to 60% in 2021, gender disparity remains a stark challenge—with a 64% account ownership rate for men contrasted by 56% for women. Gaps between the rich and the poor stand at 20%, significantly higher than the global average of 8% (World Bank Global Findex).
Queen Máxima facilitated in-depth discussions with President Gustavo Petro, Vice President Francia Márquez, Minister of Finance Ricardo Bonilla, Banco de la República Governor Leonardo Villar, along with other key figures, reflecting on a decade of advancements in access to financial tools and services, along with opportunities to boost inclusive finance and financial health moving forward. A set of roundtables with a mix of public and private sector representatives focused on development cooperation, the adoption of digital payments, and the evolving roles of public development banks and the fintech industry in financial inclusion.
Across discussions, the UNSGSA urged local stakeholders to prioritize a diversified set of financial services, including savings, insurance, and digital transactions as crucial elements of a robust financial inclusion strategy. Furthermore, she emphasized the importance of financial health as a holistic policy agenda item, encouraging the development of tools to measure and enhance financial resilience. Such strategies are vital for equipping citizens to handle economic challenges and recover from unexpected events, including climate events.
The UNSGSA spent time with local communities while in Medellín, visiting a fintech company supporting retirees to expand small business ventures, a financial cooperative working with traditionally underserved households, and a smallholder farm to see the role digital finance and platforms are playing in supporting climate smart agriculture.
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Key Priorities
Emphasizing traditionally underserved groups such as smallholder farmers and rural entrepreneurs, along with the need to break traditional cost barriers through financial innovation, Queen Máxima identified six key priorities to help boost Colombia's financial ecosystem.
1. Open Finance: The UNSGSA emphasized Colombia’s opportunity to be a regional example in open finance, stressing its potential to develop more innovative products at lower costs through diversified product channels. The UNSGSA emphasized the importance of consumer control over personal data to spur innovation.
2. Instant and Interoperable Payments: The importance of seamless and interoperable payment systems was underscored in discussions, highlighting Banco de la República’s Sistemas de Pagos Inmediatos (SPI-BR). The goal is to enable people to easily send and receive money, no matter the financial institution, to simplify and enhance their financial experience. Payment interoperability is critical to help households and small businesses save time and money, as well as open resources to invest productively.
3. Cash Reduction: The heavy use of cash transactions in Colombia was raised in meetings, including with Minister of Finance Bonilla and Banco de la República Governor Villar. Discussions centered on the advantages of transitioning to digital payments, especially for small businesses and for government-to-person payments.
4. Public Development Banks' Role Expansion: Queen Máxima highlighted an opportunity for public banks to evolve and address the needs of those without banking services, focusing particularly on small businesses and farmers to ensure their services are both accessible and beneficial. She suggested to government officials to adopt a strategy that ensures their services really meet the people's needs and are developing parts of the market not served by private institutions.
5. Promoting Financial Health as Policy Goal: The Special Advocate presented a strong case for integrating financial health into national policy, suggesting a financial health survey and strategy as tools to help Colombians build resilience. This could be critical as many people are struggling to cope with unexpected expenses, including over half of Colombia's adults who could face challenges in managing financial shocks.
6. Financial Equality for Women: Dialogue in meetings called attention to the financial divide between men and women. The UNSGSA highlighted opportunities for actions that include women in financial strategies, like having control over their own bank accounts when receiving government aid and pushed for better data to understand and solve these gaps.
UNSGSA Partners in Colombia
UNSGSA Reference Group members supporting this mission include the Better than Cash Alliance, the Consultative Group to Assist the Poor (CGAP), and the World Bank.