Triggers and barriers to financial inclusion: The use of ICT-based branchless banking in an Amazon county

Financial inclusion can be defined as the access to formal financial services at an affordable cost for all members of an economy, favoring mainly low-income groups. It has been recognized as a critical element in policies for poverty reduction and economic growth. Some successful experiences with financial inclusion reported in developing countries are associated with the use of information and communication technology (ICT)-based branchless banking. One of these experiences is the Brazilian correspondent model, an ICT-based network responsible for delivering financial services to tens of millions of poor Brazilians, most of them having no other way to access banking services. This article presents a case study of financial inclusion in Autazes, a county in the Amazon region not served by banks until 2002, when a correspondent started its operations there. Since then, Autazes has experienced economic and social changes, due in part to government social benefits and other banking services delivered at the local level. The results of our field study in Autazes suggest that financial inclusion through the correspondents' process positively contributes to local socio-economic development but, at the same time, presents clear negative signs such as low-income population over-indebtedness, reproduction of social exclusion practices and reinforcement of power asymmetries. We conclude that although access to financial resources is a fundamental way to promote local development to low-income population, such access should be accompanied by other inclusive mechanisms like financial education in order to be effective.