Rural Finance: Savings Mobilization Potential and Deposit Instruments in Marginal Areas in Mexico

This paper discusses the role of financial markets and the potential of non-bank financial intermediaries in mobilizing savings in the rural areas of Mexico.

The paper:

• Documents and analyzes the extent and modalities of savings (physical and financial) practiced by rural households and enterprises;
• Identifies and analyzes the factors that limit the mobilization of rural savings;
• Sets forth guidelines for pilot interventions aimed at expanding sustainable savings mobilization in rural areas.

It concludes that:

• Successful rural savings mobilization needs to include a strong effort to complete and perfect the reform of the legal and regulatory framework for non-bank financial institutions;
• Capacity building for financial intermediaries expanding into rural areas should consider piloting of innovative institutional arrangements and linkages.