Colombia—Design and Implementation of Microsavings Products for Financial Intermediaries (MICROAHORRO)

While certain areas in Colombia have acceptable levels of banking, many Colombians are still excluded from basic services such as a savings account. In addition to geographic isolation, there are other, more subtle barriers to financial inclusion: local informal economies, low levels of financial education, transaction costs, fees, and many realities and expectations not well understood by the country’s financial institutions.

Today in Colombia, rural people represent only one-third of the total savings accounts in the country. The financial sector also has a relevant problem of inactive savings accounts, particularly among the poorest socioeconomic groups.

Together with select financial institutions and Bancoldex, a state-owned commercial bank dedicated to development, DAI worked to expand the frontier of quality banking services to benefit geographically isolated poor people and micro-entrepreneurs. As with our other access-to-finance projects in Latin America, these savings products and services were tailored and guided by key issues that ensure sustainability: conditions of local markets, context and expectations of local people and businesses, and financial-technical viability.

Sample Activities

• Help build the capacity of local financial institutions to increase and manage microfinance savings services by providing targeted assistance and training.
• Identify keys to achieving well-ordered design/adjustment of individual institution’s savings products.
• Define advantages and opportunities based on the demand of actual and potential bank customers.
• Make controlled testing of savings products to ensure their sustainability.
• Track the number and characteristics of new customers who enlist in these financial services.