Via IMF (Den Internationale Valutafond) 

As prepared for delivery


Buenas tardes. Distinguidos Senadores, Diputado Muñoz Ledo, miembros de
la mesa directiva, honorables invitados, damas y caballeros

. I would like to express my appreciation to Senate President Batres for
the kind introduction, and to Senator Monreal for his invitation to speak
today. And I am happy to have met with your colleagues from the Political
Coordination Board just a moment ago.

It is my great pleasure to be in Mexico City, speaking in this impressive
new Senate building.

I was last here for the 2014 International Forum for Financial Inclusion,
and I return to address this same crucial issue. Today, we have an
opportunity to assess the progress of the past five years—and to highlight
the challenges still to be addressed as this great country works to improve
the lives of the millions who remain in poverty.

Mexico’s Nobel laureate poet, Octavio Paz, offered an insight in his 1950
essay El Laberinto de la Soledad.
He said,

La soledad es la realidad mas profunda de la condición humana.

That is to say, we as humans are the only beings who know that we are

We know we can break through isolation with human contact; with friendship.
But how do we break down the solitude of poverty? We do this by building an
inclusive economy and by increasing access to financial services so that
all Mexicans can aspire to save and borrow—to buy homes and build

Over the past half-decade, the world has witnessed remarkable change in the
universe of finance. Microfinance has grown rapidly. Mobile banking has
helped tens of millions—especially women—gain access to banking services.
Fintech has emerged as the frontier of finance.

I am glad to see that since my last visit, there has been progress to
enhance financial inclusion. This is thanks to reforms that Mexicans from
across the political spectrum have put in place to expand access to
financial services.

But the solitude of poverty remains a fact of life for millions, especially
those who live in the poor South.

In other words, Mexico has taken an important step on the road to financial
inclusion. But this is not the moment to pause. Much more remains to be

I know you are ready to face this task. President López Obrador has made
reducing poverty and inequality a goal of his administration. He has put
forward concrete proposals to strengthen financial inclusion. There is
reason to be optimistic.

So, what I would like to do today is, first, to speak in greater depth
about the importance of financial inclusion; then outline the advances that
we have seen here in Mexico; and, finally, address the efforts that are
still needed.

The Role of Financial Inclusion

Mexico has stood out for years as a country with strong policies and
institutions. This includes prudent fiscal policy and a central bank known
for its independence and success in ensuring low inflation.

But in recent decades growth has failed to reach the levels that can
substantially reduce poverty and inequality. As you are well aware,
corruption and crime have played an important role limiting growth, and
addressing these issues is an important policy priority. Other
constraints on growth include labor market informality, limited
competition in some sectors, and inadequate access to financial and
telecommunication services.

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Raising growth must be a priority, but the kind of growth matters.

IMF research shows that greater equality can help reinforce stronger and
more durable economic growth. Inclusive growth creates opportunities for a
better life—for families and communities. Our research also establishes
that access to financial services has an impact on this dynamic.

And one group who can benefit most is women, who are less likely to have
bank accounts—as is the case in Mexico.

This gender issue is a universal issue. Of the 1.7 billion people around
the world who are unbanked, nearly one billion are women. Empowering them
financially will open many doors, including participation in the labor

Expanding financial inclusion requires a delicate balance of government
policy and private sector initiative. The government’s role is to provide a
supportive regulatory environment that fosters competition and growth, as
well as strong and independent supervisory institutions.

Commercial banks and other financial institutions, in turn, provide the
sinews of finance. Their networks of branch offices and agents can support
the economy down to the village level. And where they don’t exist, mobile
banking and other innovations now can fill the void.

But I would also like to offer a word of caution: it is crucial to balance
financial deepening with safeguards for financial stability and consumer

Moving too fast to expand services and markets, without appropriate
supervision, carries the risks of financial instability. This is a lesson
that Mexico learned in the 1990s, and learning that lesson likely helped
avoid a more painful experience during the Global Financial Crisis.

Finally, we should also bear in mind that financial development benefits
from competition among financial institutions as well as from other
economic reforms. For example, extending internet coverage supports mobile
banking and helps reduce regional disparities.

So where does Mexico stand in its efforts to expand financial inclusion?
Let’s take a closer look.

Advances in Inclusion

Many initiatives have been undertaken since my last visit, and I would like
to highlight that the Bank of Mexico has shown impressive leadership in
this area. Three years ago, the government’s National Strategy for
Financial Inclusion was launched with the important goal of increasing
low-income households’ access to financial services.

I think the numbers speak to heartening progress.

More Mexican adults now have bank accounts. Your own national survey shows
that nearly half of all adults have accounts, compared with only 36 percent
in 2011.

Social programs have helped: over the past five years the government has
opened accounts for some four million people to receive social or cash
transfers. And 80 percent of those accounts belong to women.

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Another key development: the network of banking agents has expanded
nationwide, increasing services to remote areas. Those served in the
countryside more than doubled in six years to eight million adults.

Technology also has helped. The number of adults who use mobile banking
services has increased significantly since 2012. But the reality remains
that only a small proportion of the population is taking advantage of these

Meanwhile, the expansion of microfinance has benefited many small
entrepreneurs—again, especially women. For example, in the microfinance
network Pro-Desarrollo, women now represent 95 percent of group-credit
customers and half of individual borrowers.

More to Accomplish

Ladies and gentlemen, congratulations are in order for the progress your
country has made in pursuit of financial inclusion.

But more still needs to be done if Mexico is to achieve levels on par with
its peers.

Mexico had a little over 1,000 bank accounts per 1,000 adults last year.
But the average across emerging market economies is nearly 1,500 accounts.
I would add here that while there has been progress bringing women into the
financial system, Mexico still lags some other Latin American countries in
many respects, as IMF research has shown.

And more must be done for rural areas and smaller cities. Citizens in
three-quarters of Mexico’s municipalities do not have even one access point
for financial services within a two-kilometer walk.

And when it comes to replacing cash as a means of payment, Mexico lags even
further: 95 percent of daily purchases under 500 pesos are made with cash.
By contrast, tens of millions of people in China barely use cash at all.
They rely solely on mobile electronic payments.

The Way Forward

So, how to bridge the remaining gap, and benefit all Mexicans?

As I said a moment ago, growth has disappointed in recent decades, and that
has hampered the effort to reduce poverty. Better access to financial
services is one important way to achieve higher rates of growth. Important
reforms have helped advance financial inclusion, but there clearly is room
for more progress.

I met this morning with President López Obrador, and I was heartened by our
conversation. The President made clear that he is resolved to lift Mexico’s
economic growth and reduce inequality. He also is committed to enhancing
financial inclusion, especially encouraging much wider use of mobile

I am impressed with the government’s first steps.

One initiative is to improve electronic banking. I hear that pilot programs
are underway to test-run the CoDi digital platform to enable real-time
electronic payments via mobile phones. This could open the door to the
financial system for millions of Mexicans.

Efforts to expand the mobile network also can bring more financial services
to the most remote areas. As we have seen in other countries, this use of
technology can be a game changer. Kenya’s mobile payment service, M-PESA,
is a well-known example.

In the realm of institutional finance, the decision to allow pension funds
greater flexibility with their investments can help channel savings to more
productive uses. In time, it also may provide more opportunities to expand
participation in the financial system.

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Let us also not forget that financial institutions themselves are an
important part of the equation when it comes to financial deepening and
inclusion. Continued progress in promoting competition in the banking
sector and streamlining bankruptcy could boost incentives for banks to
extend credit.

The fintech law approved last year by the Congress was an important step
forward and provides a comprehensive framework for innovation while
protecting financial stability. This balance is embedded in the Bali
Fintech Agenda, a statement of principles developed by the IMF and World
Bank last year and endorsed by our 189 member-countries

Mexico is among the Latin American countries that are taking the lead in
encouraging the use of innovative technologies in the delivery of financial
services. Your more than 300 startups offer a menu of services like
payments and remittances, microfinance and crowdfunding, and credits to pay
for health services. I would emphasize that remittances,
which are important for the Mexican economy, can benefit from highly
transparent, low-cost solutions that enable rapid payment processing.

Fintech can provide a toolkit for the transactions that Mexicans need. This
is the point of financial inclusion—to create opportunities that offer
access and hope.

At the IMF, we have embraced the emergence of fintech and are prepared to
provide the full support of our growing technical expertise on the
regulatory aspects of this innovative technology.


In conclusion, it is a moment of change and challenge for Mexico. In the
face of an uncertain global environment and modest growth prospects, it is
encouraging to see a consensus that progress must continue—and accelerate.
But the challenge of deeply engrained poverty remains a huge obstacle that
must be addressed without pause.

There are many good ideas and initiatives, and I am optimistic that you can
continue to advance financial inclusion. I am eager to see where you are
five years from now.

Mexico is a country with a long history, deep and vibrant traditions, and
powerful aspirations for the future. The road to reaching that future must
begin by sharing the dream with all Mexicans.

The great Mexican artist Frida Kahlo once said:

Al final del día podemos aguantar mucho más de lo que pensamos que

I would like to add that by breaking the solitude of poverty, we can reap
much more than we think we can.

We at the IMF are proud to work with your government and your people to
help reap these gains.

Thank you for your time.


The Labyrinth of Solitude, 1950


Solitude is the profoundest fact of the human condition.


At the end of the day, we can endure much more than we think we

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