El Salvador legislation facilitates national financial inclusion efforts

Banco Central de Reserva de el Salvador saw further progress on its Maya Declaration Commitments with the country’s recent approval of Legislative Decree 72, a law that will provide the regulatory tools to facilitate financial inclusion efforts.

The new law establishes regulations for the generation, use and distribution of e-money. Entities that can provide e-money services now include banks, cooperative banks and savings and credit co-operatives. The law also creates a simplified method for opening savings accounts. Taken together, this law will establish a clear and enabling environment for the expansion of digital financial services across El Salvador, as well as give the low income population a less intimidating and less complicated path into the formal financial system.

Legislative Decree 72 was approved on 13 August and promulgated by the President of the Republic. It was published in the official Gazette on 3 September 2015.

Banco Central de Reserva de El Salvador’s 2013 Maya Declaration Commitments (made jointly with Superintendencia del Financiero de El Salvador) included a focus on digital financial services, which the new law will help to support, but the country has seen significant progress in other areas as well.

Financial literacy: In 2015, 37 financial literacy activities took place, reaching over 4,200 people across El Salvador. Specific workshops for women run SMEs were conducted and the country held a ‘Money Week’ to promote financial literacy and education to university students.

Data & measurement: Banco Central de Reserva de El Salvador kicked off a comprehensive survey project on 4 September 2015 to identify the financial needs of the low income population and learn about the gaps currently holding back access and usage in this group.

Agent banking: In June 2013 the bank approved technical regulations for agents and revised these regulations in March 2015. The revision allowed the provision of financial services by both correspondent agents and correspondent managers with the goal of increasing access and usage by low income populations.

With clear commitments and a continuing drive to achieve its financial inclusion targets, Banco Central de Reserva de El Salvador remains an AFI leader in the Latin America region.