Financial Inclusion in Latin America

Abstract

This entry has provided an overview of financial inclusion in the particular case of Latin America. Access to formal financial services enables individuals to carry out financial transactions more efficiently and safely and could help people escape poverty through investments in education and businesses. Moreover, financial inclusion could also keep individuals from becoming poor in the first place, as it provides tools to manage income volatility. At the macroeconomic level, the promise of reducing poverty and inequality is coupled with several potential benefits, such as the expansion of the formal economy, the reduction of banking risks and costs, job creation, financial stability, the effectiveness of monetary policies, and the stimulus for economic activity, among many others.