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Worldwide, one in every two adults is familiar with and uses the financial system. Nevertheless, in developing countries and in particular among low-income sectors, a high percentage of people have never used financial services. These estimates make clear an interesting reality: though evidence demonstrates that access to these services reduces the vulnerabilities that low-income families face and creates better conditions to escape poverty, there remain very few in poor rural zones who can take advantage of such access.
The Capital Project is an effort to expand financial access, ultimately seeking the financial inclusion of millions of families in conditions of poverty. To achieve this goal, the project works with governments in Latin America and the Caribbean to implement public policies that include programs for social protection and financial inclusion. In particular, the project links savings with conditional cash transfer programs, encouraging beneficiaries to receive their transfers from programs such as Opportunities in Mexico, Families in Action in Colombia, and the Human Development Bond in Ecuador, directly into personal savings accounts.
The idea is at once simple and powerful. Promoting the direct transfer of conditional cash payments into beneficiary savings accounts assures that highly vulnerable families have initial ties to the financial system, generating confidence in financial institutions. In the future, the opening and management of savings accounts will likely be just an entry point into the world of formal financial services, which today is reserved for a small portion of the population facing conditions of poverty.
Proyecto Capital is co-managed by Fundación Capital and the Institute of Peruvian Studies, and funded by the Ford Foundation. It has been active over the last three years in 7 countries: Bolivia, Chile, Colombia, Ecuador, Paraguay, Peru, and the Dominican Republic. Considering 111 million people (21% of the population) in 17 countries throughout Latin America and the Caribbean benefit from various forms of conditional cash transfer programs, it is clear that Proyecto Capital offers an unique opportunity to achieve include a significant number of poor families in the financial system.
“I’m going to save because [that way] my children will learn to save”
Beneficiary of Families in Action in El Zulia, Santander, Colombia, and participant in afinancial education workshop.
“If we can save we will better our future”
Beneficiary of Families in Action in Timana, Huila, Colombia, and participant in financial education workshop.
For more information on Proyecto Capital, visit www.proyectocapital.org |
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