Access to Finance
Enabling customers to become better off means equipping them with the tools to succeed. We work to increase the ability of individuals and enterprises to access essential financial services.
Why we invest in
Access to Finance
Access to Finance
When our customers have access to essential financial services, everyone benefits. Individuals and families are equipped to prepare for the future, our bank helps more customers, and society enjoys more opportunities for success.
Digitizing the customer’s journey
When she first encountered a self-service kiosk for bank loans at her local Pronto! branch in Uruguay, Gelen Gomez, a bank client since 2014, didn’t hesitate to give it a try.
“I felt comfortable with it. You sit down, type in your information on the touch screen and immediately after the request goes through, they call you to the counter to speak to a cashier. The truth is that it made the process a lot easier,” Gomez says.
Pronto! is the microfinance division of Scotiabank in Uruguay. Like Gomez, Pronto! customers across Uruguay can now request a loan in just a few minutes with the touch of a finger at self-service kiosks, located at bank branches across the country. Instead of applying in person at the bank counter, a process that could take 30 minutes, the self-service kiosks approve loans within three to seven minutes for existing Scotiabank customers.
Enhancing financial inclusion
Making the loan process for customers in Uruguay faster and easier is one of the ways in which Pronto! is improving access to finance in the country. Some 60 to 70 percent of the population is underbanked1, according to Uruguay’s Statistics National Institute. In 2014, the government passed a financial inclusion law with the objective of promoting universal access to basic, affordable and high-quality financial services, and the use of digital technology plays a big part in making that happen.
Easy, fast process
The self-service kiosks were launched in January 2017, and today every branch in Uruguay has a kiosk. The kiosks use biometric recognition technology to provide a secure way to ensure the identity of customers. Customers use a touch screen to enter their national ID number and confirm basic information before requesting the loan. Once approved, the customer collects the loan from a bank cashier just minutes later.
Growing use of kiosks
Young people, already comfortable with digital technology, have been quick to adopt the innovation, according to Nicolás Balparda, Project and Design Manager at Pronto! Older customers occasionally need a bank employee’s assistance to be guided through the process.
“We made sure it was intuitive for clients so it’s easy to use,” says Gonzalo Maqueira, a programmer at Pronto! who was part of the design team.
Customers were slow at first to use the kiosks but that has changed, says Nicolás. Now loan applications through the kiosks and through online banking are on the rise, while the amount of traditional loan applications is decreasing. Since launching, the kiosks have taken 45,000 loan applications. The total amount of loan applications has not changed, he notes, but the trend towards using digital technology is clear.
“It has helped us reach new clients,” Nicolás says. What has been most satisfying is seeing how customers appreciate the ease of the solution, he adds.
Enriching the customer experience
“At Pronto! we tend to teach the customer, to accompany them on a bank experience. We want the customer to go from underbanked to banked, and this type of solution tends to enrich this experience and give them what they want: a simple solution,” Nicolás says.
The aim of Pronto! is to help people with little or no access to financial services to fulfill their potential and improve their livelihoods, by providing relevant, affordable solutions, he explains. Eventually, he says, the bank would like to expand the number of kiosks at each branch and to use them for customers to apply for credit cards as well.
“Since the beginning, the experience has been great for clients and it highlights the company’s focus on innovation,” says Alejandra Silva, Uruguay Office Manager. “It helps make the whole experience faster.”
Karen Qiu, a Scotiabank financial advisor in Vancouver, knows firsthand what life is like for new immigrants in Canada. “I was born in China and came to Canada to finish my last year of high school,” she remembers. “Since my family believed that an education in Canada would give me a better future, they decided to send me here. But since they couldn’t just leave their jobs, I came alone.”
After completing her final year of high school, Karen enrolled at Simon Fraser University in Burnaby, BC. “It was the first time I had to pay rent,” she remembers. “I didn’t really know how to survive by myself or what to do with money.” Fortunately, Karen was introduced to Scotiabank’s StartRight program by another international student — an introduction that would have a profound effect on her life and the lives of the customers she serves.
The life of an immigrant in Canada can be challenging. Many newcomers struggle to afford necessities like accommodation or transportation because they lack a credit history. However, these same newcomers can have difficulty building credit because many lenders may be reluctant to extend loans to them without a credit history.
Scotiabank’s StartRight program provides a complete package of financial tools tailored to the needs of newcomers. Through StartRight, the Bank offers immigrants bank accounts, credit cards, rewards, and financing. “The StartRight program provides a good starting point for life in Canada,” says Karen. “By responsibly using these accounts and credit cards, newcomers can start to build a credit history— which will benefit them well into the future.”
Scotiabank’s StartRight program helped Karen establish her life in Canada. “An advisor helped me set up a banking account, walked me through online banking, and helped me setup my credit card to build credit in Canada.” explains Karen. “I also mentioned I might be looking to purchase my first home several years after graduation. She helped me build a financial plan to reach the goal of buying my first home.” (By following the plan prescribed to her by Scotiabank, Karen has almost reached this goal.)
Karen’s experience with Scotiabank and StartRight was a turning point. “I really appreciate what Scotiabank did for me that day. No other financial institution took care of me like that,” Karen recalls, “so I came up with an idea: I decided that I wanted to become a financial advisor after college and help customers too.” Upon completing a double major in statistics and economics, Karen submitted her résumé to Scotiabank and became a full-time Scotiabanker.
Today, Karen uses her position at the Bank to equip customers from all walks of life for financial success. “I love to be able to share my story with customers, especially those who are new immigrants,” she explains. “They love to hear about someone who used to be in their shoes, and they want to know how I overcame barriers.
“Canada is a very multicultural country — and a large group of Canadians are immigrants. By helping new immigrants, especially in a country with a large immigrant population, we actually can help Canadian society improve in the future. We can fundamentally change these people’s life situations.
“And my life is proof that the StartRight program works. My life was changed — and now I’m helping transform the lives of those around me.”
The town of Cabeza de Toro sits about five hours south of Lima, in the agricultural heart of Peru. For the past decade, this agricultural center has been home to the Manantial de Vida (Spring of Life) Dairy Services Cooperative. Today, this farmer-owned cooperative produces and collects milk to feed Peru’s growing population, while simultaneously providing dairy farmers in the region with a viable income.
Kate Otiniano, a Social Responsibility Specialist at CrediScotia Peru, has worked closely with the co-op as it has expanded its capacities over the years. “Today those who work with the co-op are better off than they ever have been before,” she says. “But it wasn’t always this way.”
Before establishing the Cooperative, dairy farmers had one option to get their product to market: sell their milk to intermediary collectors. This arrangement allowed collectors to take advantage of the dairy farmers, often forcing them to sell their product at prices that were well below market. At times, farmers would even have to throw away milk — the source of their livelihood — simply because someone had forgotten about them on the collection route.
In 2013, a CARE Peru/CrediScotia joint endeavor helped members of the dairy farmer community receive financial training and learn entrepreneurial skills necessary to grow their business.
Through the program, these farmers recognized the need to create a formal business in order to enact change. Only as a unified group could they have enough collective power to ensure that their prices and products would be respected. Kate explains, “A high percentage of businesses in our country continue to be informal. Through capacity building and support in formalizing their businesses, they have the opportunity to grow with their businesses, and they in turn contribute to the growth of Peru's economy.”
The birth of a co-op
The Manantial de Vida Dairy Cooperative was created in 2013. However, learning how to start and operate a business — forming a business plan, investing in new equipment, ramping up production — was a challenge for the dairy farmers.
“Participants quickly applied the things they learned in the training workshops about business plans and financial education,” remembers Kate. “By teaching business management in the real-life context of their lives, the program made it easy for them to learn.”
CrediScotia further enabled the cooperative by providing members with access to seed capital. Thanks to the training that co-op members received, they could see that using credit to accomplish clear business objectives is a fundamental part of financial growth. The cooperative used the money from these loans to greatly increase their alfalfa sowing — which is vital for feeding livestock and strengthening livestock with vitamins. As a result, daily milk production increased, along with the co-op’s revenue.
Helping customers become better off
Today, the cooperative has become an essential part of Cabeza de Toro’s local economy. The co-op now contains 38 formal members as well as 150 other small dairy farmers in the region who now sell their milk to the Cooperative. It has even begun facilitating health and educational campaigns for members and their families. “The benefits of the co-op are being felt by the entire community. Other dairy farming families no longer have to be concerned about where they will sell their milk.”
The story of the Manantial de Vida Dairy Cooperative testifies to the power of entrepreneurship. We can truly create a win-win situation where we benefit entire communities by helping businesses grow and succeed.
Although the village of Campo Alegre, Peru (about three hours south of its capital, Lima) might not seem like an important economic hub, the story of Campo Alegre’s G’Sabores bakery demonstrates the important role that microfinance can provide to small businesses and the impact it has on Peru’s growing economy.
Like many Peruvians, sisters Yolanda and Reyna Gomez come from a rural, farming background. A few years ago, they decided to stop doing agricultural work and instead pursue their love of baking. They began to bake cakes and pies and sell them on foot throughout their village.
The birth of a bakery
As their baked goods began to catch on, the Gomez sisters decided to expand into a more formal, entrepreneurial venture and opened G'Sabores, Campo Alegre’s first bakery. G'Sabores still produces the same pastries that the sisters started selling on foot, but now they also make intricately decorated cakes, as well as tarts, pies, cupcakes, and empanadas.
Just getting started
The Gomez sisters are taking steps to further expand their business by participating in a microfinance project with CARE Peru and Scotiabank that supports financial inclusion through the development of microenterprises among low-income families. As part of the project, CARE Peru advises participants on business plans, and teaches financial and entrepreneurial literacy. After reviewing these business plans, CrediScotia (Scotiabank’s consumer and microfinance segment) provides a microfinance loan to those who qualify based on business growth potential. CrediScotia also monitors the growth of these microenterprises in the field to verify the success of the program. Through this project, the Gomez sisters received a small business loan from CrediScotia, and formal business training and financial education from CARE Peru. With the loan and new business knowledge, the sisters expanded their business by offering decoration services for social events like baptisms, birthdays, and marriages and they have invested in an industrial blender to help make their bakery run more efficiently.
Part of the community
As G’Sabores has grown, the bakery has become an important part of the local economy. The Gomez sisters are part of the growing number of women in emerging markets who are seeking opportunities to build small businesses to improve their economic situations and impact their communities. In addition to the two sisters, the bakery now employs two full-time production workers and four other part-time staff to produce and deliver orders and decorate for events. Each of these employees benefits directly from the bakery’s success, earning an income that will cycle through and add value to Campo Alegre’s economy.
G’Sabores’ success has allowed the bakery to provide a meal program for local children as well. According to Jaime Almestar, director of the village’s Abraham Valdelomar school, the meal program is helping students. “With the provision of 100 daily food rations from Monday to Friday, G‘Sabores is improving the student’s learning.”
Successful business, thriving community
When a business thrives, local communities benefit as well. With access to a microfinance loan, the Gomez sisters have not only started their own business but created jobs and helped local students by providing a meal program. Providing access to finance and training is a starting point to building a more financially inclusive society.
Ester Julia Álzate is a working class, 60-year-old mother and grandmother from Yumbo, a small, industrial city and municipality in western Colombia. She has a 28-year-old daughter, a 21-year-old son, and a five-year-old granddaughter. For the past 25 years, Ester has been steadily employed, working in the accounting and portfolio division of a nationwide network of funeral homes in Colombia. According to the Latin American Development Bank, 37% of Colombians save their money at home “under the mattress” instead of using the financial system. Ester was one of these people who resisted joining the formal financial system - until very recently.
Financial access equals financial growth
Access to proper financial tools and resources can advance the success of individuals, businesses, and entire communities. The World Bank’s research shows that formal financial services spur economic growth by making it easier for customers to save money, send and receive payments, and mitigate risks by purchasing insurance.
By comparison, those that operate outside of the formal financial system do so at a considerable disadvantage. Cash transactions are generally more insecure, inefficient, and expensive than transactions made with bank accounts, and research from the Gates Foundation linked informal, cash-based economies with stunted personal and social economic development.
Colombian attitudes about banks
Despite the advantages of formal financial tools, many Colombians haven’t historically kept money inside of banks — largely due to a lack of trust and costs. In Ester’s case, a previous experience with a bank had her mistrusting the financial system. Fees were costing her more than the benefits of having an account
As part of their growth strategy, Banco Colpatria, a subsidiary of Scotiabank, looked at how they could gain more customers and enhance trust of the financial services with those that were unbanked. They decided to try removing traditional transaction fees for day to day bank accounts as well as waiving a minimum deposit when opening an account. They also waived fees for consultations so new customers could have access to banking experts.
Rolling out the strategy was a massive undertaking for Banco Colpatria. The bank was not simply rolling out a new product or service — it was trying to shift Colombian customers’ attitudes about the financial system. All of Banco Colpatria — from top executives, to marketing teams, to in-branch employees — worked together closely to spread the word about the strategy, adapt to customers’ responses, and make sure that all parts of the bank remained in alignment.
The results have been a resounding success for both Banco Colpatria and Colombian customers. By eliminating account fees, Banco Colpatria encouraged hundreds of thousands of Colombians to access the formal financial system, protecting them from the dangers of a cash-only financial existence. One year after the strategy was launched, customers had opened 408,498 accounts and deposited more than CAD$396,000.
But perhaps the most widespread advancement of the strategy lies not in what it eliminated — by removing fees — but in what it provided to customers — the ability to better manage their finances and take control of their financial well-being. Financial access has made it possible for more customers to manage their money and plan for the future, advancing the future for families, businesses, and communities throughout Colombia.
Ester’s situation illustrates the benefits created by the strategy. She was able to quickly and easily open her account online. Her account saves her time and effort, as she no longer has to leave work or home to conduct financial transactions.
Best of all, she is now motivated to save. Because, as she says, "From now on I can save for the future of my children — and grandchildren."
The following statistics highlight our efforts to increase the ability of individuals and enterprises to access essential financial services.
Underbanked considering people with no bank account, o having bank account withdraw all their money at the beginning of the month