[x] Close

Download Link

Keep up with SEEP!

Sign up for our email list and you'll be the first to know about latest news, blog posts, events & new worldwide initiatives from SEEP and its members

Blog Image

Promoting Inclusive Markets and Financial Systems

< back to Blog Main

Spotlight on Financial Inclusion Leaders Series: Expanding E-Money Services in Peru

by on Aug 27, 2014  |  posted in Annual Conference, Association Services, Microfinance  |  0 Comments

SEEP is pleased to continue our series of case studies developed with support from Citi Microfinance titled Spotlight on Financial Inclusion Leaders. This series profiles selected microfinance associations, showcasing the ways in which they are supporting their members and meeting the challenges of value-added growth in financial inclusion. These associations are leaders in implementing innovative and locally-responsive approaches to financial inclusion. Their work is having a clear and measured impact on the lives of their clients, and their experiences bring valuable new knowledge to the industry at large.


The second installment in the series is available now!

"Expanding E-Money Services in Peru: Reaching unbanked clients and advancing financial inclusion" (English)

"Expansión de los servicios de dinero electrónico en Perú: Alcance de clientes sin acceso a servicios bancarios y avance de la inclusión financiera" (Español)

 

In January of 2013, Peru became the first country in Latin America to implement an e-money law, enabling the development and expansion of electronically-based, mobile financial services for low-income and rural populations. This legislation created a class of companies known as Electronic Money Issuing Companies (EEDEs) which can issue and collect electronic money, but are not required to offer a full set of financial products and services. Peru’s legislation is distinctive and innovative in permitting both traditional banks and non-bank financial institutions to serve as e-money issuers. To ensure the integrity of e-systems, products, and services, the legislation mandates that e-money can only be issued by entities supervised by the Superintendencia de Banca, Seguros y Administradoras Privadas de Fondos de Pensiones del Perú (SBS). In Peru, all microfinance providers are regulated by the SBS with the exception of cooperatives and NGOs, meaning that the microfinance sector could play a major role in the deployment of e-money as a financial inclusion tool.

asomifASOMIF Perú (the association of regulated, non-bank financial institutions in Peru) is leading the implementation process in the microfinance sector, ensuring that the needs and perspectives of its members and their clients are captured in the creation and subsequent rollout of the legislation. Currently, only about 8% of low income Peruvians have a formal bank account while 96% of the Peruvian population owns cell phones. As a result, the expansion of e-money services has the potential to provide access to financial services to millions of ASMOIF Peru’s clients.

"E-money" and "E-wallet" at a Glance

"E-money" is a monetary value stored in electronic form and loaded onto a virtual platform.
  • Use of e-money does not require the user to establish a formal bank account.
  • It can also be converted into hard cash at any time.
An electronic device like a mobile phone becomes an “e-wallet” when loaded with e-money, similar to buying a pre-paid phone card. Once e-money is added to the mobile e-wallet, users can transfer money to other cell phone users, buy minutes, or pay bills—simply by sending a text message.

In an effort to promote financial inclusion in Peru, ASOMIF Perú has represented its members throughout the legislation process by participating on an E-Money Committee – a multi-group effort to facilitate regulatory dialogue. In the coming weeks, the E-Money Committee will determine a business model plan and ASOMIF will then be able to organize a pilot program with a few of its members. ASOMIF will also be offering training and technical assistance to member organizations and individual microfinance clients to enhance their understanding of e-money, how it works, and its potential benefits. It is expected that once e-money is operational, 1 million Peruvians will have an e-wallet during the first year and that 5 million Peruvians will be using the e-wallet system after 5 years – significantly improving financial services access and inclusion in Peru.

Read more about ASOMIF's efforts, the basics of "e-money" and "e-money" regulation, and what lies ahead for the Peruvian market in the full article, available now!

Click here to access a PDF Download of "Expanding E-Money Services in Peru" (English) Haga clic aquí para leer y descargar una copia de "Expansión de los servicios de dinero electrónico en Perú" (Español)
peru_cover_eng peru_cover_span

Stay tuned for two more installments in this series:

  • Mobile banking for financial inclusion in rural Ecuador
  • Microfinance products for low-income private schools in Pakistan.

Catch up with the first article in the series:

We also invite you to join us at SEEP's 2014 Global Network Summit on September 25 to hear from the leaders profiled in the series, and to learn first hand from their experience.

No Comments

No comments yet.
Get a photo next to your comment by visiting Gravatar.com & uploading a photo that links to your email address.

Post a Comment

All fields are required, unless noted.
We will never share or sell your email address.
Get our e-newsletter The Monthly Networker & you'll be the first to know about latest news, blog posts, events & new worldwide initiatives.

Like Us on Facebook Follow Us on Twitter RSS Feed
© Copyright 2017 SEEP Network. All Rights Reserved