On October 31, 2019, the National Financial Inclusion Strategy (ENIF) was established as a joint initiative of the Ministry of Economy, the Superintendency of Banks, and the Bank of Guatemala. Since then, it has evolved in strategic cycles, with the most recent version, ENIF 2024–2027, officially presented in June 2024.
The ENIF is a strategy coordinated by the Financial Inclusion Commission (COMIF) whose purpose is to expand and improve access to and use of financial products and services by the population traditionally excluded from the regulated financial system. In other words, it seeks to promote and encourage financial inclusion.
The term financial inclusion has historically been linked to the Fintech sector, due to the emergence of digital solutions for payments and financing, such as digital wallets and microloans, among others, which have been developed to provide access to financial services to the unbanked population.
Since 2010, the Guatemalan banking system has made efforts to promote close links between financial inclusion and the Fintech industry. This is evidenced by the resolution issued by the Monetary Board and identified as JM-65-2010 and its annex, which contains the Regulations for the Conduct of Operations and Provision of Services through Banking Agents (the “Regulations”).
The Regulations authorize banks to hire individuals or legal entities to offer, on their behalf, the financial products and services established therein to unbanked persons or those with limited access to banks. The main financial services regularly provided by banking agents are deposit collection, fund withdrawals, loan and service payment collection, and balance inquiries.
By agreement of the Superintendent of Banks identified with number 17-2022, authorization was granted for banks to delegate to banking agents financial services additional to those expressly established in the Regulations.
According to the quarterly Financial Inclusion bulletin of the Superintendency of Banks of June 2023, between March 2019 and June 2023, the growth of banking agents increased by 259.3%, while banking agencies decreased their growth by 8%.
What is the difference between a banking agent and a banking agency?
A banking agency is a banking establishment with the capacity to offer all products and services permitted under the Law on Banks and Financial Groups under Decree 19-2002 of Congress and its amendments. Meanwhile, as mentioned above, banking agents are usually neighborhood stores, hardware stores, pharmacies, among others, which can only provide the services expressly delegated to them through a contract signed with a bank and in compliance with the provisions of the Regulations.
Banking agents play a crucial role as promoters and facilitators of banking penetration among the population in rural or urban areas with little or no access to the regulated financial system, as they strengthen confidence in the financial system by offering personalized service in familiar surroundings, while complying with the training, security, and supervision requirements established by the Regulations.
Why do banking agents link up with the Fintech ecosystem if they are an extension of banks?
Because, like most Fintech companies, they use alternative channels, implement technology as an enabler, use digital platforms, their operating model requires real-time connectivity, and there is interoperability and outsourcing of banking services.
As a result of continuous technological advances, banking agents are expected to enable users to access innovative financial services without the need for traditional banking infrastructure.
Finally, it is important to note that there are increasingly more strategic alliances between banks and Fintechs, so that banking agents will increase their role as facilitators and promoters of financial inclusion by acting as an operational bridge.