While attempting to provide figures regarding mobile penetration in Latin America, we are not lost to the fact that the region is diverse, and realities may differ from country to country. Therefore, we will explore the various aspects of mobile penetration in general terms, as we set the tone for more granular articles on mobile penetration in the region in the future.

Mobile penetration in Latin America

Latin America is on average one of the highest adopters of mobile phones. As early as 2013, the region was the third in SIM penetration, behind Eastern & Central Europe and Western Europe.

According to the GSMA, more than two-thirds of Latin America’s population is connected to a mobile network, with 70% of the regional population being unique mobile subscribers in 2020. However, there is a wide variation in subscriber penetration levels; some countries such as Panama, Argentina, Chile, and Uruguay are approaching full penetration (over 80%). Other countries such as Cuba, Guatemala, Honduras, and Nicaragua,  still have some ground to cover in mobile penetration rates.

As with other regions, the mobile industry is becoming an essential economic contributor in the region. Apart from the direct revenue injection from mobile products and services, countries increasingly benefit from the improvements in productivity and efficiency brought about by the increased take-up of mobile services. In 2019, mobile technologies and services contributed at least seven-per-cent to regional GDP.

Mobile Internet in Latin America

Part of the reason for the exponential growth of mobile in Latin America is that mobile is the primary tool for internet access in Latin America, as it provides a portable way for people living in rural areas to get online. The social media boom and rise in messaging platforms have also spurred demand for optimized mobile services in recent years.

Among mobile subscribers, GSMA reports that nearly 80% are connected to mobile internet. Statistica estimates that in 2018, there were 326 million mobile internet users in the region, and that figure is anticipated to increase to over 422 million users by 2025.

Mobile internet in Latin America is expected to become more pronounced as 5G becomes a reality. Already, countries like Brazil and Uruguay have launched 5G, and other countries such as Chile, Colombia, and the Dominican Republic have kickstarted getting into 5G in 2021.

Closely related to mobile internet, Latin America has one of the highest and fastest-growing smartphone penetration rates in the emerging markets: At least 69 percent of all mobile connections in Latin America are smartphones, with predictions that 90% of all regional Internet connections will take place on mobile devices by 2022.

Mobile banking and Fintech in Latin America

Despite the large portions of the population who have access to cell phones and the mobile internet, approximately 70% of Latin America’s population is unbanked or underbanked. The gap left by financial institutions combined with the “digital infrastructure” provided by high internet and mobile penetration rates, means there is an opportunity to improve financial access through mobile technologies.

One emerging solution is digital wallets, which work through top-ups and don’t require a bank account with a physical company or branch to set up. Digital wallets are gaining traction in the region, which sees general mistrust around official banking institutions, and are fast becoming a standard payment method for bills, rent, and retail purchases.

Fintech is developing rapidly in Latin America. There were 703 fintech startups originating in the region in 2017, and there has been an influx of global fintech giants moving into the region to take advantage of the massive mobile market.

Conclusion

With a population close to 8.5% of the global population and a massive landmass, Latin America is made up of diverse cultures and there are many distinctions between different countries and sub-regions. While there are differences in mobile penetration by country and region within each country, it is clear that Latin America’s mobile penetration is growing quickly, and several countries within the region are leaders in mobile usage. With this in mind, there is a need for deeper data collection on mobile penetration in the region.

GeoPoll leverages unique mobile technologies to run research surveys in Latin America through multiple mobile modes such as SMS, mobile web links, phone calls, and the GeoPoll App. To learn more about our coverage in Latin America and other regions, please contact us.

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In every country, there are people who are denied the right to pursue a life of their choosing because they are excluded from the formal financial sector. The inequality created by this lack of access to financial tools impacts the socioeconomic mobility of these populations and hinders them from escaping poverty. There are two technical terms that describe this phenomenon, financial exclusion and financial inclusion. In this post, we will discuss both terms, explain the differences between them, and provide illustrative examples of what the terms represent.

Financial Exclusion

Financial exclusion is seen when governmental or institutional barriers impede people or businesses from reasonable and affordable access to basic financial services. Basic financial services are offerings such as formal bank accounts, insurance, transaction services, and loans.

Due to Nigeria’s struggle with financial inclusion, rates of financial exclusion have remained practically unchanged for years. Financially excluded Nigerians are unable to join the formal financial sector for a variety of reasons. Although each individual situation is different, some of the key obstructing factors keeping Nigerians from accessing essential financial services are: lack of funds, lack of required documentation for bank account ownership, inadequate financial literacy, lack of close proximity banks, high service fees, and more.

Barriers that exclude people and businesses from access to financial services, like those examples from Nigeria, can be hard for individuals to overcome themselves. This is in part due to the need for institutions and regulators to come together and focus on removing some of the systemic barriers. Evidence shows that financial exclusion inhibits people from making decisions that can positively impact their livelihoods and at a macro scale, limits economic growth

Without access to bank accounts, it is extremely challenging to save money. Although many emerging markets are largely cash-based, it is extremely expensive and risky to hold earnings in cash. Without a bank account to put earnings in, money for financially excluded people and businesses is constantly at risk of being stolen. Access to savings accounts make a large impact on the financially excluded by providing safe holding and accountability. For example, a study was conducted where female market vendors in Kenya were set up with simple bank accounts and in just 4-6 months these women were able to increase their daily investment in their businesses about 38% to 56%.

These results further emphasize the importance of access to financial services for socioeconomic mobility and highlight the impact of financial exclusion on the poor. Organizations all over the world are working on solving the complex problems that lead to financial exclusion, however, when the efforts on the topics are discussed the term used more often to describe the situations is “financial inclusion.”

Financial Inclusion

The World Bank defines financial inclusion to mean, “that individuals and businesses have access to useful and affordable financial products and services that meet their needs—transactions, payments, savings, credit, and insurance—delivered in a responsible and sustainable way.” Per this definition, financial exclusion and financial inclusion seem like they are exact opposites—financial exclusion referring to people without access to financial services and financial inclusion referring to people who do have access to financial services—however, there is a key distinction between the two terms. While financial exclusion is the problem and financial inclusion is the solution, the main factor that sets the two terms apart is that financial inclusion refers to a financial sector that provides financial services sustainably and responsibly to people of all socioeconomic classes.

In the context of global development, the sustainability and responsibility aspects are extremely important. Financial inclusion is a key aspect of solving bigger problems in poverty, such as those outlined in the UN’s Sustainable Development Goals. Responsibility and sustainability of international development—including increasing financial inclusion—are of the utmost importance because, as we have seen through development efforts in the past, short-term solutions do not often lead to lasting positive change.

Just as handing out laptops to children living in poverty won’t solve issues surrounding low literacy rates in the long run, giving people bank accounts or access to mobile money services won’t solve financial exclusion issues long-term. The discovery of sustainable solutions through monitoring, evaluation, and learning is paramount in moving toward more financially inclusive societies.

In response to the need for research surrounding financial inclusion, GeoPoll ran a study on the State of Financial Services in Sub-Saharan Africa to understand how youth in six African nations spend, save, and invest. Through our research, we found higher than expected rates of financial exclusion in even the middle- and upper-class populations, which only points further to the need for more research on various aspects of access to financial services.

GeoPoll is leading new research in rural or remote locations through innovative mobile technologies. Our platform is used by development organizations as well as commercial businesses seeking a deeper understanding of how individuals in emerging markets perceive, utilize, and interact with financial service providers. To learn more about how GeoPoll can help your organization conduct research on financial exclusion or financial inclusion, read our recent report and contact us today.

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