In the financial world, one of the best mechanisms to help eradicate poverty has to do with financial inclusion. In addition to BBVA’s Center for Financial Education and Capability, which promotes financial education as a key component of social and economic inclusion, the work of the BBVA Microfinance Foundation is fundamental.

BBVA’s Center for Financial Education and Capability promotes financial education as a key component of social inclusion

The BBVA Microfinance Foundation promotes the social, sustainable and inclusive economic development of vulnerable entrepreneurs in five Latin American countries (Colombia, Peru, Dominican Republic, Chile and Panama). Since its establishment in 2007 and through its microfinance institutions, the BBVA Microfinance Foundation has disbursed $11.8 billion to five million people.

By 2030, the foundation expects to have granted more than $25 billion to reduce poverty. In addition to microcredit, it also offers other financial services and training. Thirty-four percent of the foundation’s customers manage to escape poverty after three years of working with the foundation. It currently assists more than two million entrepreneurs, 57 percent of which are women. In 2018 alone, it granted a total of €1.28 billion in microloans.

Thirty-four percent of the foundation’s customers manage to escape poverty after three years

Those who are not part of the financial sector have a lot of limitations when it comes to meeting their basic economic needs. This can trap economically vulnerable groups in poverty and further increase the informality of their daily life. And therein lies the importance of financial inclusion – an element that affects seven of the 17 UN SDGs. BBVA understands that greater financial inclusion has a positive impact on countries’ well-being and sustained economic growth. Thus, fighting against financial exclusion is consistent with the bank’s ethical and social commitment, as well as its business goals in the medium and long term.

Thanks to the Microfinance Foundation and the concession of microcredits, many people are offered the possibility of developing a business to support their families and help others by creating jobs.

Digitization: the key to inclusion

Digital technology – and the use of smartphones in particular – is one of the tools that is contributing the most to financial inclusion as a crucial component of poverty reduction. In fact, cell phones have given more people access to financial services at a lower cost and with less risk. Therefore, the digitization of financial services is an essential factor in the promotion of financial inclusion, as it reduces some barriers to access and use the financial system, such as cost, distance, transparency, and trust. BBVA is leading the financial industry’s digital transformation, putting the opportunities afforded by technology within everyone’s reach, with innovative products and services that make its customers’ lives easier and foment the inclusion of low-income groups.

Digital technology is one of the tools that is contributing the most to financial inclusion as a crucial component of poverty reduction

In Mexico, for example, the bank has been facilitating access to microcredit for lower-income people with its product ‘Adelanto de sueldo‘ (salary advance), granting an average of 10,000 per month. Also in Mexico, BBVA makes life insurance available on ATMs.

In Colombia, its ‘Cuenta en Linea‘ facilitates the purchase of online products for customers, offering 8,000 new locations through bank correspondents to make it easier to perform transactions.

In Peru, the features of the electronic wallet have been expanded. The main goal of this initiative is to foster financial inclusion among people with less access to banking services in the country. BBVA Continental was the first bank in the financial system to enable its network of ATMs to allow users to have more places to withdraw money.

At the end of 2018, BBVA had 8.4 million low-income customers. This year, it aims to give an even bigger boost to local programs in order to increase the number of people in this group who benefit from digital technology.

BBVA’s business model is therefore based on developing a responsible and sustainable business over the long term, in which the use of new digital technologies and innovative, low-cost financial solutions designed for this group of the population are fundamental.

Furthermore, the BBVA Foundation has also been concerned about the issue of ending poverty. In 2016, it presented the Frontiers of Knowledge Award to Martin Ravallion, an Australian economist who quantified the line of extreme poverty as living on $1 per day.

BBVA  and the SDGs

BBVA contributes to all 17 SDGs  due to the wide range of businesses within the Group, including the activities of the Microfinance Foundation and its global presence.BBVA’s Pledge 2025 falls within the framework of the Sustainable Development Goals. Under the auspices of the United Nations, they are a universal call to action to end poverty, protect the planet and ensure that all people enjoy peace and prosperity. These 17 goals include new areas such as climate change, economic inequality, innovation, sustainable consumption and peace and justice, among other priorities.

BBVA contributes to all 17 SDGs  due to the wide range of businesses within the Group, including the activities of the Microfinance Foundation and its global presence.