Financial inclusion initiatives are proliferating rapidly through domestic and global efforts like the Alliance for Financial Inclusion’s “Maya Declarations.” These efforts are materializing in regulatory improvements in issues ranging from mobile banking—allowing ever more innovation, to consumer protection to access to finance for SMEs. There regulations, however, may only prove effective if they take into account the incentives that providers and sales staff have to shroud prices and adjust their behavior to undermine transparency initiatives.
To assess the quality of information provided by sales staff and the suitability of the financial products offered the World Bank, CGAP and CONDUSEF (Mexico’s Financial Consumer Protection Agency) conducted an audit study of savings and credit products for low-income consumers. (The full results have been released in a working paper and accompanying policy note and infographic with key highlights) The research team trained low-income consumers in peri-urban Mexico City and Cuernavaca to visit a range of financial institutions, seeking consumers loans and savings product. By varying the shopper’s scripts along the debt to income, purpose for the savings, and whether they were “experienced” or “inexperienced” shoppers, the study revealed important insights.