Factors that Matter for Financial Inclusion: Evidence from Peru

This study comprises a quantitative approach to the determinants of financial inclusion in Peru based on micro-data gathered from surveys. It uses significant correlations to identify those socioeconomic characteristics that may affect financial inclusion (or exclusion) of households and enterprises. It also analyzes the sensitivity to some barriers on the part of individuals who do not use banking services. The paper broadly focuses on:

• Macroeconomic scenario of the financial sector in Peru;
• Information from the Global Findex for Peru highlighting some perceived barriers that explain financial exclusion;
• Information from the 2011 National Household Survey (ENAHO) to identify the microeconomic factors affecting the likelihood of financial inclusion for households and enterprises;
• Drivers of financial inclusion for households and enterprises and an identification of the barriers to financial inclusion.

The results show that the traditionally more vulnerable groups are those with the greatest difficulties in accessing the formal financial system. When it comes to financial products, loans and mortgages appear to be better drivers for financial inclusion than saving products. For enterprises, formality and education stand out as significant factors for financial inclusion and for individuals, factors such as age, gender, education, and income level are barriers to financial inclusion.