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Breakthough technology in Peru helps boost financial inclusion

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National e-wallet system brings together 34 financial institutions, including WSBI member FEPCMAC​


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​​​​​​​​​​BRUSSELS, 10 May 2016 – Peruvian savings banks are taking the plunge into a high-tech initiative designed to boost financial inclusion. Called Bim, short for "Billetera móvil", translated as "Mobile Wallet", the unique national e-wallet system brings together 34 financial institutions – including those savings bank within WSBI member Peruvian Federation of Municipal Savings and Credit Banks (FEPCMAC) under the partnership called "Modelo Peru". The partnership has built one shared platform managed by technology giant Ericsson.

The first of its kind in the world, the platform enables people to pay, buy, send and deposit money with their mobile. The initiative also includes the development of an "ecosystem" for financial education through a virtual platform to access young people, a pilot project to educate a group of people in a selected region as well as an interactive mailing system with tips to create good financial habits.

The project took more than two years to go from concept to going live, according to the Better Than Cash Alliance (BTCA), of which WSBI is a member. BTCA helped drive the programme to completion, which ensure  transactions between accounts on the platform happen in real time. Bim users can transact across issuers and mobile networks too, BTCA noted.  It added: "Bim is not meant to replace the existing bank system but complement it. As a result, the accounts are only suitable for certain profiles of users, and the balance limits for Bim accounts are not as high as full accounts. Provided your needs fit well with the account type, your issuing bank should be able to design a program to meet your needs."

​Why it's important

Only 30 per cent of the Peruvian adult population have an account at a financial institution. That translates to 10 million people in the South American country struggling to get out of the so-called financial wilderness whereby they miss out on basic banking services – a pathway to move out of poverty. Low penetration of banking presence is especially acute in rural and poorer areas. Only 11 per cent have actually taken out a bank credit or loan in their lifetime. That said, the country has a 90 per cent take up rate when it comes to adults owning a mobile phone.

The program supported e-money related issues in the CMAC System. This was the third phase of a corporate project of the CMAC System which developed a mobile banking solution ("CMAC Movil") and Correspondent Agent ("Agente Multicaja") using a mobile. Both initiatives using Unstructured Supplementary Service Data (USSD) technology. By February 2016, more than 115,000 customers had joined "CMAC Movil" and they now have a new service channel available to make enquiries, pay loans, top-up cell-phones and to transfer funds to their own or third party accounts. The "Agente Multicaja" would be launched in May 2016, making possible to open basic savings accounts, deposits, disbursements and payment of loans.

Generating economies of scale

The business strategy designed for the CMAC Movil service allowed for the generation of economies of scale during the implementation process. The strategy also allowed for access to a corporate rate with the telephone operator in the country. It also created synergies on the channel operation learning curve with USSD technology, specialised market studies, a unique marketing strategy design as well as joint training programs for clients and staff of Cajas Municipales. With this approach, Cajas Municipales have implemented two alternative service channels to achieve the objective of rural areas inclusion.

A developing story

A story related to the BIM and Modelo Péru project first appeared on the WSBI website in September last year, when FEPCMAC, as part of its mission to support the development of the Peruvian System of Municipal Savings and Credit Banks (CMACs), had announced it had implemented the cooperative project CMAC MOVIL. That was done with a strategic partnership with the Inter-American Development Bank Group.

CMACs first to test technology

The CMACs were the first entities in Peru to test the USSD technology with interactive menus. That allowed clients to get familiarized with a technology different from SMS that was available in banks until 2013 and that by sending a text message, such as "BALANCES", the client would receive an account balance in another SMS. In other cases, it was just necessary to send the letter "B" and the client would get his balance. 

An evaluation took place by project managers to assess the need to provide the CMAC MOVIL service with USSD instead of SMS. Channel security for USSD costs up to three times higher than via SMS. Another important factor was the protection of client information. The need of a confirmation SMS delivery was also analyzed for the transaction, since it was identified in the carried out focus groups that it was an important component to inform the client that the transaction had been made successfully; considering also that the SMS was going to replace a receipt ("voucher"). These considerations have been important in the step towards the e-money financial service, which will appear in Peru directly with USSD technology, which has supported in the process of introducing a safe and friendly service.

WSBI, FEPCMAC and financial inclusion

As the largest provider of accounts for the poor worldwide, WSBI and its members, which includes FEPCMAC, looks for ways to address financial inclusion. WSBI is active in the global policy debate on setting an enabling environment for financial inclusion. WSBI drives the member commitment to the 2012 Marrakech Declaration to provide 'An Account for everyone'. Association members also pledged to reach 1.7 billion customers and 400 million new transaction accounts by the end of 2020 as their contribution to the World Bank Group's strategic goal of Universal Financial Access by 2020. WSBI announced last month that its members had exceeded projections on its commitment to the Universal Financial Access 2020 Goal both in terms of total numbers of customers as well as transaction accounts.

WSBI and the Better Than Cash Alliance

For WSBI its especially important that it had some input to this project via its partnership with the Better than Cash Alliance (BTCA). The world savings and retail banking body helped by obtaining funding from BTCA for an element of the Movil project. 

WSBI announced in January 2014 that it had joined the Better Than Cash Alliance, an alliance of governments, private sector and development organisations committed to a global movement away from cash to electronic payments that provides resources to those who commit to making the transition. The Bill & Melinda Gates Foundation, Citi, Ford Foundation, MasterCard, Omidyar Network, USAID and Visa Inc. fund the BTCA and the U.N. Capital Development Fund serves as its secretariat. As part of its commitment to joining the alliance, WSBI pledged to expand the number of electronic transactions within its network, which is expected over time to result in a reduction in the proportion of cash transactions undertaken.

​As a full member of BTCA, WSBI has become eligible to respond to requests for applications for grant funding under its Technical Assistance Fund. The aim is to develop joint projects with WSBI members with the aim of increasing the number of electronic transactions. WSBI has also been represented on BTCA's Knowledge Management sub-committee and has provided input and feedback to a number of country diagnostics completed that measure the baseline state of the shift from cash to electronic payments, assessing the trajectory of the shift and recommending case studies and measurement activities to support the development of toolkits for BTCA stakeholders. These diagnostics have raised considerable interest among relevant governments.​


>> See the case study: EN | ES

Digitalisation; Financial Consultancy; Training and Consultancy; Financial education; Financial inclusion; Branch management