Mexico’s National Council for Financial Inclusion

Over the last few years, the Mexican financial system has been moving toward a more inclusive financial system by expanding access to and usage of financial services.

According to a survey conducted by the Ministry of Finance, the number of Mexicans in 2009 with a formal savings product substantially increased over the previous five years. This progress mainly resulted from amendments to the legal framework and implementation of specific policies allowed expanding the supply of diverse financial products. These policies complemented the fostering of consumer demand with appropriate measures on financial education and consumer protection.

Supply-side actions

• To enhance competition, the Ministry of Finance created a new category of niche banks (with less stringent licensing and prudential requirements), facilitating the entry of new competitors to the banking system.
   
• Amendments to the legal framework introduced banking agents and mobile financial services to help lower operating costs while expanding access and usage.
   
• The modification of anti-money laundering regulations, including the simplification of Customer Due Diligence/Know Your Customer (CDD/KYC) and transaction monitoring, helped promote the use of certain banking services, such as mobile financial services.

Demand-side actions

• Financial intermediaries enhanced transparency with respect to fees and commissions. The Ministry of Finance introduced rules requiring bank statements to clearly disclose the costs of financial services, and banks are required to offer basic deposit accounts with no fees.
   
• The Ministry of Finance established basic pillars of appropriate consumer protection and strengthened the powers of the National Agency for Financial Consumer Protection (CONDUSEF).

Financial inclusion requires high-level coordination among a wide array of Mexican financial authorities and private sector representatives who are committed to designing and implementing a financial inclusion strategy and thereby improving the quality of life of Mexico’s low-income population. To meet this coordination challenge, a Presidential decree, issued on September 30, 2011, created the National Council for Financial Inclusion (the Council). The objective of the Council is to ensure the commitment from financial authorities and private sector participants to design, coordinate and promote Mexico’s National Financial Inclusion Policy.

The main functions of the Council include:

• Analyzing and formulating policy proposals related to financial inclusion and establishing the guidelines of the National Financial Inclusion Policy.
   
• Planning and executing financial inclusion policies and programs at national, state and municipal levels; defining medium- and long-term goals for financial inclusion.
   
• Coordinating activity on financial education with the Financial Education Committee.
   
• Proposing necessary changes to the regulatory frameworks at the federal, state and municipal levels.

The Council is comprised of the following ten members:

1. The Ministry of Finance and Public Credit (President of the Council)
2. Undersecretary of Finance and Public Credit
3. The Governor of the Central Bank of Mexico
4. Deputy Governor of the Central Bank of Mexico (as appointed by the Governor)
5. Federal Treasurer
6. Head of the Institute for the Protection of Banking Savings (IPAB)
7. President of the National Financial Consumer Protection Commission (CONDUSEF)
8. President of the National Banking Securities Commission (CNBV)
9. President of the National Pension SystemCommision (CONSAR)
10. President of the National Insurance Commission (CNSF)

Besides these permanent members, representatives from other government agencies and national financial associations as well as other private sector stakeholders will be able to participate in the Council sessions.

The Council’s mandate is aligned with the G20 Principles on Financial Inclusion, with special emphasis on leadership, which is crucial given the valuable participation of private sector stakeholders in these sessions.

Mexico is convinced of the importance of a coordination body like the National Council of Financial Inclusion and will promote, during its G20 Presidency, the establishment of similar bodies in other countries. Mexico will continue working at the international level to promote financial inclusion.