MIF & CAF support expansion of inclusive rural financial services in Southeast Mexico

(Mexico City, Apr. 17, 2013).- MIF (Multilateral Investment Fund) and CAF -development bank of Latin America-signed an agreement to support a project that will establish mini branches for inclusive rural financial services, an initiative to solve the difficulties many Mexican rural residents face to access financial services.

The agreement is part of the Technologies for Financial Inclusion Programand the amount awarded is US$277,072, for a total cost of US$453,417 to the project.

The project, an initiative by Solución Asea, seeks to install and connect a network of mini branches in rural populations to provide financial services in Southeast Mexico -including the states of Campeche, Chiapas, Quintana Roo, Tabasco and Yu¬catán- with a population of more than 11 million, half of whom live in poverty. Branches are present in only 27 percent of municipalities in the region, compared with 43 percent in municipalities in the rest of Mexico.

The insufficient supply of financial services in marginalized rural areas is due to the fact that they are more costly and risky than urban or semi urban areas for financial intermediaries, because of both low population density and insufficient infrastructure.

Mini branches allow the use of modern technology, which offers more security for customers' information as well as easier access to basic financial services through the use of Point of Sale terminals (P.O.S.), magnetic band cards and the use of NIP.

These P.O.S. terminals are set up in businesses that are affiliated with Solución Asea's Trust Network, called Asea Mini Branches. These established and recognized businesses have the support of Solución ASEA. At these branches, customers can make cash deposits and withdrawals, group and individual credit payments, check savings and credit account balances, make transfers to other accounts, receive and send remittances, pay public service bills, purchase micro insurance, as well as make other transactions in a safe and reliable manner.

Solución ASEA identified that the use of these technologies in highly marginalized areas opens a wide array of opportunities for its customers, by reducing savings and credit operations' transaction costs that customers in these areas currently pay in order to have access to these services.

The model also provides a broad range of financial services that can be adjusted to the population's needs and represents shorter trips to make withdrawals, payments or purchases. It also reduces the risks involved in handling cash, increasing customers' safety and improving the quality of life, by bringing closer the services from which they have been left out.

The project is expected to benefit 30,000 customers who access products and financial services through the mini branches as well as increase bancarization in these areas.

This project was selected as a finalist in the Technologies for Financial Inclusion Program's 2012 Call for Proposalspromoted by the Multilateral Investment Fund (MIF), the Inter American Development Bank (IDB) and CAF -development bank of Latin America- with the goal of testing and applying technology that contributes to broaden the reach and improve the efficiency of financial services for micro enterprises and low income households in Latin America and the Caribbean.

About the Multilateral Investment Fund

The Multilateral Investment Fund (MIF) works with the private sector to develop, finance, and execute innovative business models that benefit entrepreneurs and poor and low-income households, their businesses and crops. The goal is to provide tools to low income populations in order to increase their income and facilitate their access to markets and create the necessary skills to compete on those markets, with access to finance and basic services including green technologies. ??The MIF is a laboratory for testing pioneering, market-based approaches to development, and an agent of change that seeks to develop successful businesses for micro, small and midsize enterprises. More information at www.fomin.org

About CAF - development bank of Latin America

The mission of CAF -development bank of Latin America- is to promote sustainable development and regional integration, by financing projects in the public and private sectors and providing technical cooperation and other specialized services. Established in 1970, it currently has 18 shareholder nations -16 in Latin America and the Caribbean, along with Spain and Portugal- and 14 private banks, and is a major source of multilateral financing as well as an important source of knowledge in the region. More information at www.caf.com.