SPONSORSHIP
OFFICIAL DOCUMENT 2010
FEBRABAN and FELABAN · October 21 and 22, 2010
I LATIN AMERICAN FINANCIAL
EDUCATION CONGRESSOfficial Document
summaryLatin American Financial Education Congress
Summary | 3
OPENING | Educating for sustainable growth 4PANEL 1 | The importance of financial education and skills 10NGOs, an icon between banks and citizens 13Public education will set the regulatory dose 15Investing is not enough. We need to evaluate results 17PANEL 2 | How technology can be helpful in Financial Education 22A museum to attract attention 24The Internet has taken Visa’s program to 20 countries 24Financial entertainment, a simple way to educate 26PANEL 3 | Financial education for children and youths 30In Brazil, the project aims to reach 900 schools 32Colombia: efforts to avoid over-indebtedness 34PANEL 4 | Social inclusion, the key to economic growth 38A project to reach over 2,000 people 41Família no Azul 42PANEL 5 | Bancarization to increase financial inclusion 46In Maranhão, clients want more 48Neither misers nor loan sharks 50Microcredit, a social issue. Profit is a consequence 51PANEL 6 | Financial Education for the bancarized population 54Education for long term planning 55Training employees and avoid the saying “the shoemaker’s son always goes barefoot” 56Catching up with your budget, a FEBRABAN project 58PANEL 7 | Learning to save and investing to prosper 62Lack of regulation makes indebtedness grow in Chile 63The Central Bank of Brazil prioritized the education of financial institutions 65After saving, learn to invest 65PANEL 8 | Responsible finance, profitable banks 68In 2011, the Consumer Code for Latin America 70Say a clear “no” to those in debt 71Closure 74
openingEducating for sustainable growth
Opening | 5
If it depends on the efforts of financial institutions to disseminate financial education,
Brazil will grow with sustainability in relation to credit as an ally of development. “We
are convinced that we can contribute to the welfare and improvement of living condi-
tions in Latin America”, said Ricardo Marino, president of the Latin American Federation
of Banks (FELABAN), an entity that promoted, alongside the Brazilian Federation of
Banks (FEBRABAN), the Latin American Financial Education Congress, held on October
21 and 22 in São Paulo, Brazil.
During the two-day event, with Citi Foundation, Itaú, and Santander as the main sponsors,
technical discussions and presentation of cases showed the awareness of financial institu-
tions regarding the need to invest in education. Obviously, without government support
in education and sustainment of stable macroeconomic indicators and modernization of
infrastructure, there will hardly be any good use of the efforts in financial education.
What is seen is the formation of a multitude of professionals and volunteers to dis-
seminate basic concepts of economics and banking products and services. “The world
has changed. Latin America has changed. Brazil has changed. We have a country grow-
ing through both economic stability and credit. The big challenge is to help people use
credit as a tool for growth, not as a product which generates difficulties in the future, as
happened in many countries”, says economist Marcos Lisboa, vice-president of FEBRA-
BAN and Itaú Unibanco.
Credit is slowly being rediscovered by the Latin American societies. Everyone dreams
of a better future: decent housing, household appliances, healthcare, automobile, and
leisure. Now, with the growth of Latin American economies, dreams are coming true,
mostly thanks to stability and credit, which is already close to 30% of the Gross Do-
6 | I Latin American Financial Education Congress
mestic Product (GDP), considering seven countries in the region (Brazil, Mexico, Argen-
tina, Chile, Colombia, Peru, and Uruguay).
Santander’s expectations are that credit in the region will represent 41% of the GDP
in Latin America by 2015. In Brazil, credit already accounts for over 46% of the GDP
in 2010. The efforts of the institutions concerning financial education also focus on
increasing household savings. According to the Santander survey, savings are expected
to leap from the current 57% to 72% of the GDP by 2015.
Despite the rapid progress in the last two years, there is a long way to go, especially
in comparison to the United States, where credit exceeds 100% of the GDP. However,
global experience says that expanding credit and increasing the customer base is not
enough. It is important to make people aware of the correct use of financial products.
Lisboa stressed the importance of financial education for the new Brazilian consumers.
More than 30 million Brazilians have ascended to a new social class, and are eager to
consume. “Credit products are part of the routine of professionals working in financial
institutions. But to the vast majority coming to the job market, everything is new.”
According to Wilson Levorato, general director of FEBRABAN, women are the main
allies of the institutions in the financial education program. “The woman is the con-
science of the family. She is the one who controls the earnings and, in a way, controls
her husband and children. She is the one we should invest in.”
If the banks’ agenda is to raise consumers’ awareness on how to get the most of finan-
cial products, to regulatory agencies such as the Securities Exchange Commission of
Opening | 7
Brazil (CVM) the main task is to protect investors. According to Alex Broedel, director
of CVM the new economic reality has brought a large group of borrowers as well as
investors to the capital market.
“We already have a significant market, and we are going to have one of the largest in
the world”, said Broedel in his lecture at the Congress. For CVM, financial education is
the pillar to the regulation of the financial system. “The level of financial education of
the population impacts the type of system regulation. The more educated citizens are,
more information they will demand about companies and that alone will allow the
market to be less regulated”, he said.
Since the capital market in Brazil is just beginning, regulation is already being built
according to the most modern international standards. It is expected that Financial
education will progress at a fast pace so that market self-regulation becomes a trend.
In recent years, CVM has promoted several initiatives to protect investors and create an
even stronger market, from the requirement for certification of professionals working
in financial institutions to new rules for investment clubs, for example.
This was the first step for the exchange of experience among Latin countries. FELABAN
joins forces with the FEBRABAN to promote financial education. Next year, the Con-
gress will be held in Peru, which shared rich experiences with more than 300 partici-
pants attending the event.
“Our goal is to spread the best practices at the institutions and contribute to the sus-
tainable growth in the region,” concluded the current president of the Association of
Banks of Peru and new president of FELABAN, Oscar Rivera. Credit availability and capi-
8 | I Latin American Financial Education Congress
tal increase are the main challenges for Latin American banks that face an optimistic
scenario after overcoming the financial crisis. We cannot lose this opportunity to grow
with sustainability, and financial education is a major supporter of this challenge.”
The committee for financial education was created during the Latin American Con-
gress. Its goal is to support programs developed in the region, including a virtual library
for the most successful experiments, according to Enrique Beltran Dávila, executive
director of the Training Institute of the Association of Banks of Peru (www.ifb.edu.pe).
As of 2011, there will be a portal with projects from more than ten Latin American
countries. “We all know the challenges of financial education and we can facilitate this
process through joint efforts. The idea of the committee is to leverage the result of
these projects”, he said, inviting all attendants to publish their projects on the portal
and exchange ideas to solve the problems in these countries. “I hope to see you at the
next congress in Lima.”
Opening | 9
We all know the challenges of financial
education and we can facilitate this process
through joint efforts”, said Enrique Beltran
Dávila, executive director of the Training
Institute of the Association of Banks of Peru
Moderator
Pam Flaherty, President & CEO, Citi Foundation, USA
NGo
Monique Cohen, President of Microfinance Opportunities, USA
private sector
Loreta García Muriel, Director of the Financial Education Program,
Banamex, “Saber Cuenta”, Mexico
public sector
Eduardo Sibaja, General Director, CENAT – Consejo Nacional de Rectores
de Costa Rica and former Ministry of Economy of Costa Rica
The importance of financialeducation and skills
panel
panel i The importance of financial education and skills | 11
The panel’s discussion was about the importance of financial education and skills as im-
portant tools for the future of Latin America. The focus of all speakers was the pros and
cons of an active promotion of financial education for the benefit of society in order to
support a healthy growth.
Financial education is a topic of relevance to all countries around the world. It was
before the international crisis in 2008 but the significant losses for governments, busi-
nesses, and families made education the number one priority for governments and
financial institutions. “The crisis has prompted us and we changed our language to
include financial capacity in our talking, not only financial education”, said Pam Fla-
herty, President & CEO of Citi Foundation, who moderated the first panel of the Latin
American Financial Education Congress, with the main topic of discussion being “Why
are financial education and skills important to the future of Latin America?”
The first one to share experiences was Loreta García Muriel, director of the Financial
Education Program of Banamex, the largest bank in Mexico, and coordinator of the
committee of the Association of Mexican Banks. “Our goal is to raise the awareness
in the companies about the benefits that financial education brings to employees and
the general population. We have already captured 21 commercial banks that have ac-
cepted our invitation”, the executive of Banamex says proudly.
“The experience of Mexican banks with financial education has already accumulated
significant returns”, says Ms. Muriel, with the remark that the institution is present in
the culture of the Mexican population for 150 years. Mexico is a country marked by
the diversity of its population, much like Brazil. Over 20 million people live in Mexico
City, the country’s capital. About 25% live in poverty and 20%, in extreme poverty.
12 | I Latin American Financial Education Congress
“People from the north are different from people in the south. We have various social
realities”, she said.
To achieve the goal, diversity is the hallmark of the programs developed by Banamex.
“We have stories for children and business management courses for adults. “We have
developed computer games, board games, and theater, educational materials, and
content to be taught in fixed and mobile classes, as well as a free support service phone
line. We work with parents of children attending public schools and we train students
who are interested in being community promoters”, she said.
According to her, the government and many companies are convinced that Financial
Education contributes to the country’s growth. As people learn how to make correct
decisions, they start having better living conditions, and having a life project is a natu-
ral consequence of a maturing population. “Many financial products are complex and,
therefore, education has to go hand-in-hand with progress and technology. These are
the reasons why we have programs with different approaches”, she said.
Ms. Muriel says that, six years ago, the issue comprised financial education to the general
public. “Finance was a subject ignored by people. The challenge was to bring topics such
as household budget and the need for saving closer to the reality of people”, she stated.
It was then that the group decided to have a better understanding of what people
needed to learn about money. According to a survey conducted by t he University of
Mexico in 2008, about 14% of Mexicans have formal savings account, 80% prefer to
use cash rather than cards, two of every three Mexicans have financial records, and
69% have never used banking services.
panel i The importance of financial education and skills | 13
NGOs, AN icON bEtwEEN bANks ANd citizENs
Monique Cohen, president of the Nongovernmental organization (NGO) Microfinance
Opportunities, based in the United States, shared her experience about the real role of
an NGO in a financial education program.
The challenge for NGOs is to work with the population that is part of the lower social
tiers. Great part of it is illiterate. To make people have a checking account at a bank,
the first thing to do is educate them to become aware consumers of financial products.
But even before that we need to have the right financial product and service that works
for this social class, culturally limited and often living in environments without proper
sanitary conditions, being exposed to various diseases.
“We deal with these two audiences. Our job is to help our partners design the right
products and to help people with the basic knowledge on how to manage their financial
lives properly and reap the benefits with their whole families”, she said. In Ms. Cohen’s
daily life, she realizes that the great challenge of the banking process lies in the fact that
people feel overwhelmed and have little trust in financial institutions.
“We have to build trust. The NGOs can make the interface between consumers and
institutions”, she said. The situation becomes even more complex as many branchless
banks begin to enter this segment. “Earning the trust of people in an institution that
has no open doors on the street is even more challenging.”
When the program began, with the content taught in classrooms, the first step was
to teach how to make a household budget. Learning how to organize income and ex-
14 | I Latin American Financial Education Congress
penses, chances of people saving increases. She said that this method does not work at
the lowest tier of the social pyramid. A householder will hardly have time to go to class.
The rooms are just tools and, in some cases, costly. “Many institutions cannot afford
this cost”, she remarked.
One solution was to start using different media with wider scope, such as radios or
comic books, with huge penetration in lower-income classes, not to mention the fact
of being less expensive, given the sheer volume of people the program intends to
achieve. “Imagine the challenge of teaching an almost illiterate person, without any
knowledge on financial institutions.”
We must also invest in the technological education of these people. “If the clerk asks the
password, the person gives it. That can bring many problems”, states the executive of the
NGO. She says she has started to work with a credit card company in India. “Since it is
not present on the streets, with branches like the banks, the challenge is even bigger”.
The initiative that had the best result was the “word of mouth”, that trains volunteers
who pass on to the community what they have learned, and also includes financial edu-
cation in episodes, similar to the soap operas, which reach more than 12 million people.
In many of the programs they have developed around the world, the NGO Microfi-
nance Opportunities has developed three topics: budget, economy, and planning. But it
was necessary to adapt the original design for each region. In Latin America, the group
developed a program for women who work out of home and are breadwinners. “In
our research, we realized that financial reserve is viewed as an object of desire and we
wanted to help women build their savings”, she said.
panel i The importance of financial education and skills | 15
Developing programs for young people aged 16 years or more has been another initia-
tive with a positive return. The program consists of teaching youths how to get a job
and how to manage money as they begin to build assets.
Women, according to the experience of the NGO, need to be prioritized by most
financial education programs. In this period working on the subject, the NGO per-
ceived five stress points that go from adolescence to adulthood. Women start their
professional life still in adolescent. Some get married young, but it does not last long
and then they have to fend for themselves as head of a household . “Many are aban-
doned and abused”, she declared.
Another niche of women in need of attention comprises those who migrate to other re-
gions or countries and need to manage the money in a scenario of religious or political
conflict. And finally, there is old-age. In many countries, there is no assistance for the
elderly. “We must adopt programs for those grandparents who usually manage families
and need to understand more about financial products and services”, said Ms. Cohen.
Consumer protection is a strong political ally of financial education programs, as they
bring balance to the responsibility of each party. According to Ms. Cohen, these pro-
grams are available in six languages and have already reached half million people in
direct training and 5 million by the mass media.
PubLic EducAtiON wiLL sEt thE rEGuLAtOry dOsE
Compulsory or voluntary, the participation of financial institutions in financial educa-
tion programs has grown around the world for simple reasons: whether for the bank to
16 | I Latin American Financial Education Congress
have better profits by having clients who know how to make choices or to avoid exces-
sive regulation by regulatory bodies.
Eduardo Sibaja, general director of CENAT – Consejo Nacional de Rectores of Costa Rica,
shares the country’s experience. “Latin America did well in the crisis and it is helping increase
bancarization levels. These new customers are going to change regulators’ approach. If finan-
cial institutions do not act in a transparent, conscious manner with these new consumers, reg-
ulation will increase”, said Mr. Sibaja, who has been Minister in Costa Rica on two occasions.
He says the key question is how to change the behavior and culture of clients. Hav-
ing done well in the crisis, Latin America now lives a strong bancarization movement.
“Many people are leaving the poverty line and looking for new opportunities. This is a
great challenge for the banking system and governments. So we need to reassess the
financial education programs and see whether they are reaching people”, he warned.
For him, social media can be combined with financial institutions in this process of
education, especially for micro and small enterprises. In Costa Rica, all schools have
computers. “We use these computers to teach children and parents”, he said. But to
use the technology, people need affordable access to it.
Government participation is vital on several fronts in the development of financial edu-
cation. “If that does not occur, it will be very difficult for financial education programs
of private enterprises to have results”, said Mr. Sibaja. In Costa Rica, 8% of the GDP is
used in education. “We have a literacy rate of 95% and that makes a difference. It is a
long-term work. We have prioritized education for 50 years and that is why we have
achieved today’s standards”, he said.
panel i The importance of financial education and skills | 17
The general director of CENAT said that Costa Rica developed programs specifically
designed for secondary schools and universities, aiming to create projects that really
attract society toward education. It does not help create a program that does not
reach its audience.
The strong commitment of the government of Costa Rica at this moment is to reduce
indebtedness. When the effects of the 2008 financial crisis hit Costa Rica, each citi-
zen had two debit cards and one credit card. According to him, education is a lifelong
process. It is not a matter of giving checking accounts, but giving conditions to man-
age accounts. Providing schools is not enough. “We need to teach young people to
become entrepreneurs”, he said, ending his presentation with the following sentence:
“I believe that Latin America has a great opportunity. We are starting to grow and we
can grow sustainably.”
iNvEstiNG is NOt ENOuGh. wE NEEd tO EvALuAtE rEsuLts
Investing large sums in programs is not enough. We need to evaluate if they work. This
phrase seemed to be a mantra in the Latin American Financial Education Congress.
Evaluation of programs was an issue addressed by just about all participants of the
event sponsored by FELABAN and FEBRABAN in October 2010.
According to Ms. Muriel from Banamex, evaluation is one of the most important steps
of financial education programs. “We have 50 strategic partners and 20 within the
banks that use us as an added value to the product. There are more than 92 programs
and we are always looking for ways to measure what we need to improve to really get
the benefits of duty.”
18 | I Latin American Financial Education Congress
The first step to control the efficiency of the projects is the recording of programs. The
second is monitoring people who participate, both educators and learners. The third is
to do a survey to determine people’s satisfaction with the teaching received. The fourth
instrument used by Banamex to measure results is sending messages via bank or card
statements. “If we have answers, we know they are alert and aware of the communica-
tion.” Finally, Banamex makes an impact assessment to see if there really were practi-
cal and behavioral changes in the students’ lives.
Ms. Cohen said that, at the NGO, the strategy is to work with a step-by-step evalu-
ation. A research is conducted prior to the beginning of the courses and another 18
months after its conclusion. She said that, in Bolivia, the NGO has achieved spectacular
results. About 98% of the course participants were able to save and pay their loans. The
result was similar in Sri Lanka, where 54% of clients that kept the loan for six months,
even insolvent, managed to pay off their debts.
The course practice in some cases is not reflected in an expected result. In Bolivia, for
example, Ms. Cohen says that budget control courses have helped people save. The
reserves, however, did not go to the banks but to buy food. “The context of the popu-
lation is important and often it is through the evaluation research that we can detect
what needs to be improved.”
Another lesson learned by the evaluation method specialists is that the message must
be repeated more often than may be imagined. It is also necessary to do some research
to find out what makes sense to people. An interesting case is that of farmers in Mala-
wi, Africa. They receive money from the harvest once a year. “They spend everything as
soon as they get it and their wives hate it, as they go the rest of the year in difficulties”,
panel i The importance of financial education and skills | 19
said Ms. Muriel. The solution was to create a course on the concept of savings, which
also helped improve the quality of family relationships.
Satisfaction surveys also allow organizers to detect errors. Using the wrong language
and having workshops in hotels or schools, without taking students to the banks, for
example, were some of the mistakes detected, and eliminating them made the pro-
grams more effective. “Nothing is safer for the consumer than being inside the house
of those who deals with them”, said Loreto.
In Cambodia, located in Southeast Asia, for example, the NGO where Ms. Cohen works
has been invited to work with young people who migrated from the countryside to the
cities. They were illiterate and took seriously everything that was written in magazines.
So, it was developed a program to magazines, and young women read it for the illiter-
ate majority.
Reducing the number of products, offering what really has value to the client and pro-
viding better training for employees who serve the public were other variables men-
tioned during the satisfaction surveys of the courses.
20 | I Latin American Financial Education Congress
Nothing is safer for the consumer than being
inside the house of those who deals with
them”, said Loreta García Muriel, Director of
the Financial Education Program, Banamex,
“Saber Cuenta”, Mexico
panel i The importance of financial education and skills | 21
thE ExPErts’ AdvicE fOr succEssfuL PrOjEcts
· Understand what you want to achieve with Financial
Education.
· Know the population you want to reach and create tailor-
made programs for each of them. Adults learn in a different
manner from children.
· Do market research to know what you target audience wants.
· Do not reinvent the wheel. There is plenty of ready-made
material that only needs to be adjusted to your needs.
· Work with different materials, from comic books to
merchandising on soap operas.
· Synergy, synergy, synergy. Information sometimes is enough,
but interacting with your audience to create situations of
reflection is important.
panelHow technology can help inFinancial Education
Moderator
Jonathan Wheatley, Correspondent, Financial Times, Brazil
acadeMy
Marisa Eboli, Professor, USP – University of São Paulo, Brazil
private sector
Silvia Singer Sochet, General Director, Interactive Museum of Economics,
Mexico
private sector
Sabrina Sciama Alonso, Corporate Affairs Manager, VISA Brazil
NGo
Timothy Flacke, Executive Director, Doorways to Dreams Fund, USA
panel 2 How technology can help in Financial Education | 23Abertura | A
How technology can contribute to the mission of Financial Education was the central
topic of this panel. Jonathan Wheatley, correspondent in Brazil for the Financial Times,
initiated the discussion of the second panel of the Latin American Financial Education
Congress with an example of a purchase by his maid. “She bought a cell phone which
cost R$169.00 in cash, paying ten installments of R$49.00 at Casas Bahia. This shows
that there is much work ahead to educate the population.”
Marisa Eboli, professor at the University of São Paulo (USP), highlighted a survey con-
ducted to identify key practices in Brazil and provide an overview on various aspects
of corporate education. 54 companies from various sectors were surveyed between
August and October 2009.
Financial institutions are the most innovative ones in training and education in the
area of social responsibility. Ms. Eboli emphasized the role of leaders. As in general
education, having a good school does not suffice. Leaders have to assume the role
of educators in day-to-day activities, passing on values to employees. “Regardless of
how much a company is willing to invest, we should encourage leaders and manag-
ers to use this role to effectively develop education and training of both internal and
external audience”, she said.
Ms. Eboli gave an interesting hint regarding the expenditures of companies with
formal classroom courses. According to her, about 60% of the companies’ educa-
tion budget is spent on hotel accommodation and tickets. “This resource could add
a lot to train people. I believe that this data is very important and companies should
take it into account.”
24 | I Latin American Financial Education Congress
A musEum tO AttrAct AttENtiON
A very interesting case of using technology to teach people about finance and eco-
nomics is the Mide, the world’s first interactive museum of economics, opened in
Mexico City in 2006.
Silvia Singer Sochet, director of the museum, which is housed in a former 18th cen-
tury convent after 12 years of restoration, said that about 800,000 people have vis-
ited the museum. Children and adolescents learn in a playful way how the economy
works in practice.
The goal is to make people understand the purpose of things in their lives, such as
understanding that job generation generates income and this income is used to buy
goods, and to produce what people want to buy, companies need to invest in machines
and hire people. “Understanding the economic process, visitors will better understand
the financial education courses”, she concluded.
thE iNtErNEt hAs tAkEN visA’s PrOGrAm tO 20 cOuNtriEs
Sabrina Sciama Alonso, manager of corporate relations at Visa Brazil, said that Visa
has been investing in education for over 20 years, even before technology being so
advanced. “Before the Internet, Visa partnered with schools putting the content to
be given in class in leaflets. This practice has spread across the United States. But
it was thanks to advances in technology and the advent of the Internet that Visa
could make rapid progress in the financial education program, one of the group’s
key strategy pillars.
panel 2 How technology can help in Financial Education | 25
The Internet has enabled the creation of websites, providing a big boost to what had
already been done. Ms. Alonso says that, today, the main website has more than 1
million hits per month. Currently, the group invests in financial education programs
in over 20 countries.
In Latin America, Visa’s program began in 2005, focused on finance practices, mainly
in Mexico, Brazil, and Colombia, in partnership with NGOs. In each of the regions of
the different countries, the financial education group seeks to adapt the content of the
initiatives to the local needs identified in research.
In Brazil, for example, the primary need detected related to those initiating their finan-
cial life. Those who started their working life or were joining college went to different
websites to look for information. To facilitate and add value, Visa gathered the informa-
tion on one website and this gave rise to the Practical Money Skills for Life program,
with the support of several partners.
With the Practical Money Skills for Life program, Visa expects to reach 20 million peo-
ple worldwide by 2013. It is a bold target, but feasible to be realized. “We already got
to 9.5 million by June this year, with approximately one million in Latin America”, she
said. In 2010, the Practical Money Skills for Life program also started to interact with
social networks and opened a communication channel on Twitter.
Another Visa initiative highlighted by Ms. Alonso at the Latin American Financial
Education Congress was the Financial Football (Bate-Bola Financeiro), hosted at the
Financial Literacy website. With three difficulty levels, the game is targeted at chil-
dren and youths.
26 | I Latin American Financial Education Congress
The questions asked after each play bring financial knowledge to the players without
them being aware of it. To move from one play to another, they must answer questions
on economics and finance. Building on the theme of the World Cup, Visa created the
Practical Money Skills Theatre in partnership with Banco do Brasil, which took children
from public schools to Centro Cultural Banco do Brasil in São Paulo. There are also
courses for teachers in NGOs, such as the Gol de Letra Foundation.
fiNANciAL ENtErtAiNmENt, A simPLE wAy tO EducAtE
The crisis showed us that fewer Americans are able to manage their financial life. This
led to various actions related to financial education, aiming to develop and test innova-
tive programs to improve the financial literature and economic security of Americans.
According to Timothy Flacke, executive director of Doorways to Dreams Fund, technol-
ogy has come to solve major problems such as lack of time or difficulty to take people
to the classrooms, as well as the cost of investments in educational programs.
“The big challenge now is to use technology to spread financial education to create
engaging, different content”, he said. At the NGO Doorways, the solution was to face
financial education as financial entertainment. The audience of the NGO is formed by
single mothers, who have two children, two jobs, and use public transportation. “We
can only teach these people with very interesting content that provides information
for their specific needs”, he affirmed.
One of the videos presented at the Congress shows real cases of financial chaos ex-
perienced by celebrities. It really draws attention to know that an American actor
panel 2 How technology can help in Financial Education | 27
has gone bankrupt for not managing his finances properly, or that one of the most
famous singers may lose everything for not dealing with her addiction to alcohol or
credit card purchases. With this motto to attract the attention of Internet surfers,
the NGO has developed a game where everyone has the chance to be the financial
manager of celebrities.
Much of the products developed by the NGO take into account that three quarters
of Americans play video games, especially those available on mobile phones. “Based
on that, we invest in financial games that teach, by repetition, the most common
form of learning.” According to the research carried out after the game, 58% of the
respondents said they were more confident to manage their own financial life after
20 minutes of play.
28 | Congresso Latinoamericano de Educação Financeira
Regardless of how much a company is willing
to invest, we should encourage leaders and
managers to use this role to effectively
develop education and training of both
internal and external audience”, said Marisa
Eboli said, professor, USP – University of São
Paulo, Brazil
painel 2 Como a tecnologia pode ajudar na Educação Financeira | 29
thE ExPErts’ AdvicE ON hOw it cAN hELP us iN thE PrOjEcts
· Assess the feasibility of meetings, courses and lectures
through teleconferences. Virtual meetings often free up
resources spent on transportation and hotels to expand the
scope of programs, hiring people, and even for developing
software that streamlines customer service.
· Use creativity to turn economics and personal finance
lessons into something interactive and playful, such as the
Mude museum, in Mexico City.
· Develop financial education websites with different appeals
to all strata of society, such as athletes, senior citizens,
children, women, and people who love traveling, cars, and
other hobbies, to reach different audiences.
panelFinancial education for children and youths
Moderator
Cassia D´Aquino, Financial Education Specialist and Corresponding
Member, IACSEE – International Association for Citizenship, Social, and
Economics Education, Brazil
private sector
Lic. Maria Elena Acevedo, Corporate Social Responsibility Director,
Banking Association of Panama
public sector
José Alexandre Vasco, Superintendent, CVM – Securities Exchange
Commission of Brazil
NGo
Julieta de Guarin, Manager of Finance for Exchange, Dividendo por
Colombia
NGo
Vanderson Berbat, National Project Coordinator, Unibanco Institute, Brazil
panel 3 Financial education for children and youths | 31
Financial Education for children and youths. The importance of promoting a respon-
sible culture of finance in the early years of development. What, when, and how to
develop it were some of the topics of this panel.
Financial education is not just an issue related to Mathematics and does not merely
depend on schools. It is connected to several family’s everyday situations and matters.
Therefore, the example of parents is essential in order to have financially aware adults.
That was the main conclusion of the discussions of the third panel of the Latin American
Financial Education Congress. The first to share her experience was Maria Elena Acev-
edo, Corporate Social Responsibility director of the Banking Association of Panama.
She spent 10 years in the Ministry of Education of Panama and now manages proj-
ects for banks with the aim of bringing better quality of life for students. According to
her, half the challenge is overcome by the awareness of parents willing to teach their
children that the more financial education they have, the more likely it is for them to
achieve their life projects. “Desire is the first step to achievement.”
However, simply teaching them how to manage resources and how important it is to
save is not enough. This, she said, demands a more profound awareness. “We need to
be aware that we use the money for food, housing, and leisure. But children also need
to know that not everything can be achieved with money”, she remarked.
Bringing this philosophy especially to young people from lower income classes is of vi-
tal importance to control spending on trends and goods that are far from their purchas-
ing power, but often generate debt or even crime. “We must acknowledge that money
32 | I Latin American Financial Education Congress
is important and that without money we can do other things. It is a way to replace the
culture of poverty by the culture of prosperity”, said the educator.
She said that the government of Panama and the banks are aware of their roles in the
struggle to minimize the level of poverty and reduce the lack of adequate knowledge of
students. “This is reflected in business and in government and that is why we are invest-
ing to allow 4,200 young people to be able to pursue a career to have their own money
and invest it properly”, she told the interested professionals who filled the auditorium.
With this philosophy, the government of Panama created in March 2010 a financial
education program in partnership with banks to improve the youths’ quality of life.
Banks sponsor the program training volunteers who every month talk about different
subjects in courses at schools or lecturing in different locations, as well as the content
required for the lectures.
iN brAziL, thE PrOjEct Aims tO rEAch 900 schOOLs
A massive project began to be put in place in Brazil in 2010. “It is a proposed strat-
egy for financial education. It must be a State program, not a government one. There
are more than 50 million students in 240,000 public schools, and that cannot be ac-
complished overnight”, said José Alexandre Vasco, Superintendent of the Securities Ex-
change Commission of Brazil (CVM), the second speaker of the panel.
This is the Financial Education in Schools Program, a pilot project of the National Strat-
egy for Financial Education (ENEF), which, since August, has included the subject in
class for students in public schools. The aim is to encourage youths to be protagonists
panel 3 Financial education for children and youths | 33
of change in their social status and families. There are 900 schools and 22,000 students
in the first stage of the project, which will include financial education as a crosscutting
theme, discussed during the normal school hours or in complementary shifts.
In the ENEF’s project, teachers are trained as multipliers to pass what they learn to
other opinion makers. They are also trained as educators via the e-learning system.
The group has also developed a website (www.vidaedinheiro.com.br) to answer par-
ticipants’ questions.
According to Mr. Vasco, an entity will be responsible for monitoring the national finan-
cial education program and assessing its impacts on the lives of Brazilians, in spite of
the difficulty involved in assessing the effects of education on this type of initiative. He
mentioned, as an example, the Organisation for Economic Cooperation and Develop-
ment (OECD), which has financial education programs in 79 countries. Despite the ex-
perience, there is no formal statistical measurement acknowledged worldwide, about
the impact of financial education on students.
Vanderson Berbat, national project coordinator of the Unibanco Brazil Institute, which
has been investing in education schools and now participates in the ENEF, brought
data that shocked the audience. According to him, in the same period in which 181,000
Haitians were killed in the earthquake this year 100,000 young people in Brazil, from
15 to 24 years, died from external causes.
“We started thinking about the huge damage to a society that loses so much talent
due to lack of information and wrong decisions and, based on that, we thought about
the development of a program to contribute to human development of young people
34 | I Latin American Financial Education Congress
in vulnerable situations”, he said. Among the causes of deaths are robberies to obtain
an object of desire, such as a pair of sneakers, which could be easily acquired if there
were any perspective of work, income, and credit. Other youths who choose to buy,
run into indebtedness just to buy a next-generation mobile phone. “Indebtedness
leaves many youths without the perspective of seeking knowledge in schools. They
believe that educational institutions will not solve the financial problems of their
families”, he emphasized.
According to Mr. Berbat, research shows that young Brazilians believe that school alone
does not solve family financial problems, and thus they prioritize money. “This audi-
ence does not see the need to have knowledge. They lose the opportunity to study to
seek a position in the market”, he explained. And even more worrisome: with the first
salary, the youth ends up running into debt to purchase a “fancy” mobile phone in ten
installments. “They lose the perspective of a future and live a ‘I-will-buy-it-now-and-
see-how-I-can-pay-later’ way of life”, he said.
For these reasons, educational programs that help young people be aware that they
can change their reality based on a financial planning are vital to sustain the growth of
an economy by encouraging citizenship. “Children are the adults of tomorrow, better
prepared to consume and save in an ethical manner.”
cOLOmbiA: EffOrts tO AvOid OvEr-iNdEbtEdNEss
The experience of other countries with similar projects has been positive. According to
Julieta de Guarin, manager of finance for exchange of the Colombian project “Finanzas
para el Cambio”, financial education helps to generate economic stability, since people
panel 3 Financial education for children and youths | 35
start to manage their finances more effectively, avoiding over-indebtedness and gener-
ating savings for future needs.
She said that, between 2005 and 2009, over 580 teachers and 344 parents were
trained, being responsible for passing knowledge of financial education to more than
60,000 children from 50 schools chosen by the organizers of the Colombian project.
“It is amazing to see how the program helps not only children but everyone involved,
since they also had no idea how to manage a budget, which is the first step to having
money to invest.” Ms. De Guarin’s experience shows that children can help change the
behavior of parents, and learn from their example. “That is why learning has to reach
everyone within a society.”
The program “Finanzas para el Cambio” is developed by the Foundation Dividendo por
Colombia, the Corona Foundation, and Citibank-Colombia, as well as public-private part-
nerships with the Ministries of Education of Bogotá, Cartagena, and Medellin, and organi-
zations such as Lei de Bolívar, Antioquia, and Mamonal Microempresa Foundation.
The program developed in Colombia is very careful to not tow any financial product
to education. Therefore, all primers used to teach the content material in schools are
offered free by the Colombian central bank. There are four course modules: money and
economy; where to save money; credit growth; and how to manage your money.
36 | I Latin American Financial Education Congress
We must acknowledge that money is
important and that without money we can do
other things. It is a way to replace the culture
of poverty by the culture of prosperity”, said
Maria Elena Acevedo, Corporate Social
Responsibility Director, Banking Association
of Panama
panel 3 Financial education for children and youths | 37
thE ExPErts’ AdvicE tO fiNANciALLy EducAtE chiLdrEN ANd yOuths
· The first step is to involve parents. The challenge should be
easy if parents are examples to their children.
· Conduct research to identify the target audience and be
able to develop content that speaks the language of the
population to be reached.
· Develop content that makes children and youths aware of
values that show that not everything is gained with money,
but with an ethical attitude.
· Emphasize that it is possible to replace the culture of poverty
by the culture of prosperity.
· Prioritize content aiming at conquering children in such a
way that they are able to build the financial literacy in their
parents.
panelSocial inclusion, the key toeconomic growth
Moderator
Rubens Sandenberg, director of economic affairs of FEBRABAN, Brazil
private sector
Giovanna Prialé, responsible for the consumer product and services board
of the Superintendence of the Board of Insurance and Pension Fund
Administrators of Peru
public sector
Ana Maria Stuginski, head of the department of partnerships of the
Foundation for Development of Education in Brazi
NGo
Fernanda Aidar, coordinator of the project “Família no Azul”, Project
Arrastão, Brazil
panel 4 Social inclusion, the key to economic growth | 39
How to increase bancarization in Peru, a country with 40% of workers in the informal
market and much of the population using loan sharks to get access to credit at abu-
sive rates that reach 800% annually? That was the main challenge faced by Giovanna
Prialé, responsible for the consumer product and services board of the Superinten-
dence of the Board of Insurance and Pension Fund Administrators of Peru, when she
took office. According to her, regardless of socioeconomic level, the country’s bank-
ing index is low. Savings represent 28% of the GDP and the penetration of financial
products per capita reaches 30%.
According to Ms. Prialé, social inclusion is the key to the country’s sustainable growth.
For that to happen, the superintendence has three pillars: transparency, financial edu-
cation, and customer protection. “The private sector is vital to ensure inclusion and
economic growth”, she affirmed.
The first point, according to Ms. Prialé, is to make people understand financial products.
“Banks have to be aware of consumer rights.” After that is accomplished, the result
will be good format products that will generate less noise in the communication and
understanding of the banking sector.
The next step is to make people aware of what banks have to offer, “very transpar-
ently”, she emphasized. One suggestion is that the actual cost of the product is public
so that consumers know how much to pay before acquiring the service. Since 2002, the
entity has published bank fees for consumers to evaluate and compare costs. “Anyone
can access the website and see the concepts of products and their costs”, she said.
For her, this challenge requires public-private partnerships, known as PPP. “They are
40 | I Latin American Financial Education Congress
essential in many areas.” The first involves Consumer Protection. In Peru, regulators set
regulatory frameworks. One of their provisions is that complaints must be addressed
by the banks within 30 days. If the consumer is not satisfied, there is a public agency,
with branches spread across the country and independent agents to assist in conflict
solving. With this mechanism, less than 1% of disputes reach the regulatory agency.
That is, the banks solve 99% of the problems.
Statistics show that consumers are receiving better information and banks are willing
to improve their processes. According to Ms. Prialé, out of 10 complaints against banks,
8 are solved in favor of the consumer. “This shows the attitude of banks to retain cus-
tomers in the long term.”
The other part of the Superintendence’s work in Peru is to encourage household sav-
ings through the PPP. There are three branches across the country to guide the public,
from how to build a budget to how to invest the money left at the end of the month.
All activities include the partnership with financial institutions.
The media, according to Ms. Prialé, is a strategic partner in the issue of transpar-
ency and guidance to the public. By publishing fees on the website, the agency and
the banks have generated a wealth of material for journalists to create articles on
this topic. “Nearly every day, we have a story in the newspapers covering personal
finance. Only this year, we computed 198 articles until July, without needing to go to
the journalists. They came to us”, she said.
Another activity where the PPP is successful is the financial training of educational
multipliers. This work is free and in coordination with private companies. The aim of the
panel 4 Social inclusion, the key to economic growth | 41
courses and lectures is to increase savings, avoid debt, learn how to use cards properly,
and plan for retirement.
According to her, the main success of the program occurred in 2008 when the PPPs
managed to convince the Ministry of Education about the importance of Financial Edu-
cation. “There was a major barrier, with the claim that much of the population did not
believe in banks, saying the institutions just wanted to make money.”
As of 2009, students at secondary schools have received financial education classes,
with trained teachers and teaching materials produced by the PPPs. She said that these
courses reach 20% of the population every year. The innovation for 2011 will be to
take financial education to rural areas. In this sense, an agreement was signed with the
Ministry of Agriculture for distance learning.
A PrOjEct tO rEAch OvEr 2,000 PEOPLE
The Foundation for Development of Education seeks to contribute to the development
of the public schools of São Paulo, responding to the demands and guidelines of the SEE
– State Department of Education. The focus of the foundation’s work is to modernize
schools with new teaching technologies, and thus contribute to improve education and
quality of life of the population. Their actions are centered on planning, implementa-
tion, and production development of teaching materials, construction, renovation and
expansion of schools, and purchase of educational equipment and materials.
The projects Empresa Educadora, Escola em Parceria and Escola da Família seek to
bring financial education to the public in actions usually performed in communities on
42 | I Latin American Financial Education Congress
the weekends, focusing on four areas: work, culture, sport, and health, according to Ana
Maria Stuginski, head of the partnership department of the Foundation for Develop-
ment and Education.
“Now we also include the environment, showing that if the river is dirty, people are
going to have health problems and costs related to it”, she said. The program, started
in 2003, targets at children and youths and has already been implemented in 630 mu-
nicipalities of São Paulo in 2,350 state and 322 municipal schools.
Among the partners of the Foundation, Ana Maria mentioned Serasa Experian and Citi,
which have implemented various activities to enable trainers to teach basic concepts
to children and youths through theatre, classrooms, and textbooks.
The partnership with Serasa Experian, for example, gave rise to the project Sonhos
Reais in 2008. About 22 volunteers disseminate the concepts of financial education in
six schools. In 2009, the instructors trained 86 people on weekends. In 2010, the ac-
tion continued in other five schools. According to a survey conducted to measure the
results, those who received financial education classes were able to get out of the red.
fAmíLiA NO AzuL
The project Família no Azul, which aims to reach 2,000 people, was developed by
the NGO Arrastão, founded in 1968 by a group of mothers in the district of Campo
Limpo, in São Paulo. The goal is to give financial education and activities for children
aged 6 to 14. Most of the project focuses on training young people for life, according
to Fernanda Aidar, coordinator of the project. They address issues of microfinance,
panel 4 Social inclusion, the key to economic growth | 43
budgeting, debt management, and savings. “Developing projects that drive people to
consciously manage their money is also a way of ensuring the sustainability of our
business”, said the executive.
She explained that Família no Azul was launched in March 2010 thanks to a partner-
ship between the Citi Foundation, the NGO Arrastão and Programa Escola da Família
(PEF) of the Foundation for the Development of Education. The expectation is to train
60 volunteers from universities and 12 educators from the project Arrastão, who will
work with people living close to the project and the PEF schools, addressing youths +16
years and adults. The multiplication process comprises the formation of groups of 36
persons, in which a pair of certified volunteers will provide 12 hours of workshop. 2,592
people are expected to attend the courses.
44 | Congresso Latinoamericano de Educação Financeira
Developing projects that drive people to
consciously manage their money is also a way
of ensuring the sustainability of our business”,
said Fernanda Aidar, coordinator of the project
“Família no Azul”, Project Arrastão, Brazil
panel 4 Social inclusion, the key to economic growth | 45
thE ExPErts’ tiPs fOr sOciAL iNcLusiON
· The partnership between companies and governments is
essential for social inclusion to be a process led by financial
institutions.
· The PPPs allow us to go farther, faster.
· The first step is to have financial products that respect
consumers with clear and fair rules.
· Invest in the dissemination of general data about the industry
and the competitors so that clients will be able to compare
costs and benefits. In addition to providing transparency, it
intensifies competition among the players, helping to create
more innovative products and services.
· Have the media as a partner in the dissemination of personal
finance and guidance to the public.
panelBancarization to increasefinancial inclusion
Moderator
Sérgio Mindlin, Chairman of the Board of Ethos Institute
public sector
Ana Evelyn Jacir de Lovo, Director, Department of Special Legal Programs
Secretariat
private setor
Jerônimo Ramos, Microcredit Superintendent, Banco Santander
private setor
Enrique Beltran Dávila, Executive Director, Training Institute of the
Association of Banks of Peru
NGo
Regina Célia Monteiro Krogh, Chairperson of the Board, CEAPE-MA – Small
Entrepreneurs Support Center of the State of Maranhão
panel 5 Bancarization to increase financial inclusion | 47
In this panel, experts discussed how education can increase financial inclusion and im-
prove credit access opportunities to the non-bancarized, promoting resource manage-
ment, savings generation, and risk management.
The first speaker was Enrique Beltran Dávila, executive director of the Training Institute
of the Association of Banks of Peru. Financial education has been a priority issue in
Peru for a few years, but took on greater importance with the dramatic growth of the
GDP over the past two years. He explained that the institute was created to increase
financial education in the country, with initiatives ranging from primary education to
specialized courses targeted at those seeking to attend graduate school.
The Training Institute of the Association of Banks of Peru works with various govern-
mental and private institutions, as well as the media, in an effort to improve financial
education in a country marked by high levels of money laundering. One of the ac-
tions of the Institute involves the judiciary, with whom it has been working since 2005.
Judges should understand the financial market to make quality and fast decisions. “The
trials that used to last four years, now take four months”, he said.
But the fight is not over yet. “We continue working hard so that all files are scanned and
completed in four weeks. This action helped to raise the legal security of the country,
which now has a better classification.
Another target audience of the institute is journalists. “The more specialized they are,
the better the quality of the debate”, he emphasized. Radio is a highly prized medium in
the country. The institute also trains trainers to bring financial education to public and
private schools. 8,000 teachers were trained by the banking system, says the newly
48 | I Latin American Financial Education Congress
elected president of the financial education commission of FELABAN.
iN mArANhãO, cLiENts wANt mOrE
Regina Celia Monteiro Krogh, president of the Center for Support to Small Entrepreneurs
in the State of Maranhão (CEAPE-MA), shared with the audience her experience in the
development of microcredit in the state, characterized by strong social inequality.
The CEAPE-MA is a nonprofit civil organization of public interest whose central objec-
tive is the promotion, strengthening, and socioeconomic development of owners of
microenterprises and families located in poor urban areas of the state of Maranhão.
“Our mission, as a Social Organization of Public Interest (OCIP) is to reduce inequality by
giving credit to the low- and very low-income populations. She said that the provision of
microcredit was created 25 years ago. Initially, the program was focused only on women.
Later, it changed its name to include small entrepreneurs males, seeking to contribute
to the growth of micro and small business aiming at social and economic development.
CEAPE agents give credit and intensive training to the clients. The trained group makes
visits to see if the client is using the money in the business and to provide financial
advice and tips, such as products display on the shelf. “We talked about things such as
not placing cleaning products close to food or the use of jackets, to contribute to the
formation of a more professional image to consumers”, he says.
In a partnership with Citi Foundation, the CEAPE has trained nearly 3,700 clients in ba-
sic financial literacy. There are five training modules: How to Save, Debt Management,
panel 5 Bancarization to increase financial inclusion | 49
Handle with Care, Financial Market, Know the Options, and Financial Negotiations.
According to her, most micro-entrepreneurs of Maranhão are informal and illiterate.
They are business owners and do everything at the same time with the help of their
families. Hardly the team can take them to the classroom. “For that to happen, they
have to close the shop, causing loss of sales and profit”, she said. Thus, education has
to be performed differently from the classroom model.
The CEAPE’s most widely used course is budgeting. By putting on paper the costs and
revenues and most sold products, micro-entrepreneurs are able to understand what
they should buy and what products are not worth investing in. When the microcredit
client has children, CEAPE provides financial guidelines so that they, being more open
to learning, may help their parents. An interesting point in the course is to train micro-
entrepreneurs on being “sensitive” to negotiate their clients’ late payments.
With these actions, CEAPE intends to strengthen its relationship with its consumers
and reduce default through a higher-quality active credit portfolio, raising the level
of bancarization and encouraging savings. According to Regina, there are over 22,000
customers. A survey conducted in the first half of 2010 showed that 28% of respon-
dents had savings before the financial education courses. After the classes, this rate
rose seven percentage points, reaching 35%.
CEAPE expects to transform the OCIP – Social Organization of Public Interest in a mi-
crofinance bank to be able to offer new financial products such as cards and insurance.
“We reached a point where customers want more”, she said.
50 | I Latin American Financial Education Congress
NEithEr misErs NOr LOAN shArks
Neither misers, nor loan sharks. Social development requires balance between these two
ends. Without investment, there is no job generation and, therefore, no income. “If we
want to develop with fairness, we need to produce a virtuous circle so that the economy
will increase people and the country’s wealth”, said Ana Evelyn Jacir de Lovo, Director of
the Department of Special Legal Programs Secretariat, from the United States.
The sociologist and economist, who has chaired the consumer advocacy and served as
consultant to the World Bank, said that the core of financial education programs is to
have well-designed products that respect the consumer and give information to the
population. “Just look at the reasons and consequences of the global crisis and there
will be no doubt that this is a fundamental issue to help improve people’s lives”, she
emphasized, criticizing the excess of offerings, even for those who have never asked, as
in the credit card sector.
Like the other financial education experts, the sociologist cites the fact that a large por-
tion of the society has consumption patterns that are out of the economic standards.
“This consumption pattern leads to indebtedness that breaks the virtuous circle”, she
said. With a population with such a drift in consumption behavior, it is very important to
invest in financial education. “There is a big trend to bancarization in Latin America, but
it cannot be achieved without providing information to the consumer”, she emphasized.
She says that a study was carried out in El Salvador to see the profile of consumers of
financial products. The first reason for using banks is to deposit the salary. She shared a
personal experience of lack of information about the simple use of a checking account.
panel 5 Bancarization to increase financial inclusion | 51
“Nobody says that fees will be charged even for barely using the account and when you
want to close the account, you just cannot”, she said. In her opinion, the relationship
between banks and clients can no longer be in the “negative surprises” style and must
change to a win-win style.
She noted the importance of education in schools but also the importance of course
sponsors having a neutral position. “The focus is teaching and not selling products”,
she emphasized, adding the importance of monitoring whether the resources invested
were used in the projects.
micrOcrEdit, A sOciAL issuE. PrOfit is A cONsEquENcE
“Microcredit is a transforming cause, which redeems the dignity of the needy popula-
tion”, said Jerônimo Ramos, Microcredit Superintendent of Santander, who has been
working with the lower-income people since 1985, with a focus on entrepreneurs. With
such a long history, he now devotes himself to the collection of social indicators in
microcredit in an attempt to make this topic broader in the day-to-day life of countries.
Working with the low-income population requires a cultural change in financial in-
stitutions. In microfinance, agents have to see the dreams of entrepreneurs, while
traditional banks see guarantees offered by companies. In a company, the lender is
concerned with planning. In microfinance, the analysis starts much earlier: what is
the dream to be accomplished?
To make this dream come true, financial agents should understand how they buy and
sell such products and services to identify the gain margin and the correct calculation
52 | I Latin American Financial Education Congress
of the dose of credit. “In the right dose, credit is a remedy. In excess, it is poison. “
Mr. Ramos highlighted the importance of the institution to look around the micro-en-
trepreneur’s surroundings. Generally, almost 90% of income generated in the commu-
nity comes from people who live there. The investment is worthless if there is no sani-
tation to provide health, safety or conditions to take their children to school. “Within
this value chain, we are responsible for contributing to prevent the dream from turning
into a nightmare”, he said.
The expert says that institutions interested in working with microcredit must understand
the real needs of the clients, not profit, which is a consequence of the immense responsi-
bility of distributing the credit line on the right time. When the entrepreneur is successful,
and most have been, it generates the self-employment. The challenge of microcredit is to
turn the company into a value generator company in order to be sustainable.
A survey conducted by Santander shows that micro-entrepreneurs can generate up to
12 jobs within the community. He mentioned a client who, in the first cycle of relation-
ship with the bank, took a loan of R$300. She is now investing R$30,000 to purchase
a property and will hire 12 employees for the supermarket in the community. Even
better, he generated income to keep his children in school, building a better future. A
better reality for the children than the one she lived.
“If the customer becomes insolvent that means we have failed”, said Mr. Ramos. There-
fore, he says, it is important to understand what made the client miss the way and
bring him/her back to the virtuous circle. Microcredit is the way out of poverty and the
entrance to a world where we can all be happier.
panel 5 Bancarization to increase financial inclusion | 53
thE ExPErts’ tiPs tO iNcrEAsE bANcArizAtiON
· Bring financial education to strategic publics, such as judges,
journalists, and consumer protection agencies. By better
understanding the way institutions work, they will have more
balanced opinions.
· Develop content and means of dissemination that respect
the daily reality of the population to be bancarized.
· Detect the needs of the population as well as the
opportunities to publish financial education within the
context of each community.
· Develop a relationship and a credit program in which
the entrepreneurs’ dreams are more important than the
guarantees offered.
Microcredit is a transforming cause, which redeems the dignity of the needy population”, said Jerônimo Ramos, Microcredit Superintendent of Santander
panelFinancial Education for the bancarized population
Moderator
Mara Luquet, Journalist, Brazil
acadeMy
Ricardo Rocha, Professor of Finance, Insper – Institute of Education and
Research, Brazil
private sector
Uriel Galicia Negrete, Director of the Financial Education Program, BBVA
Bancomer, “Adelante con tu futuro”, Mexico
private sector
Fábio Moraes, Financial Education Director of FEBRABAN, Brazil
panel 6 Financial Education for the bancarized population | 55
EducAtiON fOr LONG-tErm PLANNiNG
In this panel, speakers discussed how financial education helps to identify the best
products and services according to social classes (A, B, C, and D). The skills and tools
necessary to develop wise consumption were also discussed.
Are consumers prepared for the sophistication of the financial system? With this ques-
tion, Ricardo Rocha, a finance professor at the Institute of Education and Research (In-
sper), began his lecture at the Latin American Financial Education Congress. For all
that has been said in the five panels of the event, it is clear that the consumers need
guidance and information since they are leaving inflationary economic conditions to
join a cycle of stability. That is, they need to stop living in the short term and need to
start living in the long term.
In this transition process, the financial system has been developing complex products,
while increasing capillarity to reach all social classes. Therefore, financial education of
the population is a must. The big question, according to Rocha, is: who will prepare
individuals? The individual themselves, their family, or school?
According to the professor, financial education cannot be responsibility only of the
banks. One of the first challenges is to embed budget control in people’s lives. “The les-
son that people can only spend what they have in order to be able to start saving for the
future is a basic one”, he said. Although it seems an outdated issue, Mr. Rocha argues
that the society has very little access to information and training to use the data for its
growth. “The challenge is to transform information into knowledge.”
56 | I Latin American Financial Education Congress
This challenge will help people to get out of the red and even guide them on how
to invest in stocks. The possibility of long-term planning is a prerogative of countries
reaching stability and offers citizens the right to organize their lives. The point is to act
now and not to allow families to run into more debt than they can handle, which will
create a problem for everyone involved in the value chain.
Mr. Rocha worries about credit growth in Brazil in an environment where financial
illiteracy is a reality. “Consumer credit exceeds business credit. There are nearly 30
million people with loans”, he said. According to the professor at Insper, institutions
can take advantage of some phenomena in Brazil, such as the boom of telephone
sales. “Mobile phones should be used as tools for the dissemination of knowledge, so
that people can make appropriate decisions.”
Mr. Rocha stresses the importance of informing people about what capital market
means. “It is not a matter of saying “buy and get rich or do not buy”. The question is:
Learn to manage, save, and participate in the growth of companies and the country.
Education is a project for all.”
trAiNiNG EmPLOyEEs ANd AvOid thE sAyiNG “thE shOEmAkEr’s sON ALwAys GOEs bArEfOOt”
Within this context of economic growth, BBVA Bancomer, a leading financial institu-
tion in Mexico, shared the institution’s philosophy with the experts. Financial education
is part of social responsibility.
“At BBVA, we work in order to people build a better future. Financial services are a
panel 6 Financial Education for the bancarized population | 57
vehicle that contributes to financial inclusion for those seeking to purchase goods
for their own benefit. “Under this priority, the institution works based on four pil-
lars: financial inclusion, financial education, social responsibility, and commitment
to society.
The bank uses the data from a research to build its communication with society. Among
the population without a checking account, three out of ten people have washing ma-
chine. Yet, among the bancarized population, seven out of ten have the equipment.
This shows the great purchasing power that consumer credit can generate. “We want
to provide information for people to manage their own lives and we believe this will
generate a large mass of savers who will use the bank in their own benefit.”
One way is to teach financial education in the language of each audience, without
making a general program for everyone. All materials are produced respecting diversity.
“Adults learn by selection. Children learn by repetition. Each one within their model, we
will help them crossing the path toward knowledge.”
BBVA Bancomer also uses the media to disseminate the bank’s financial education
program. There are five types of content, from savings to credit, created in a simple
language different from that used by institutions. In addition to the portal www.adel-
antecontufuruo.com.mx, the bank gives classes in major cities across the country and
offers mobile classes to people who cannot commute to the classes.
BBVA has already trained 32,000 employees in financial education. “We want to
avoid the saying “the shoemaker’s son always goes barefoot”. According to him,
251,000 people have participated in the training offered by the bank. “Besides the
58 | I Latin American Financial Education Congress
reputation and prestige to the bank’s image, we detected improvements in the
financial indicators, showing that financial education is reflected into better deci-
sions and increase in equity.”
cAtchiNG uP with yOur budGEt, A fEbrAbAN PrOjEct
This is a great opportunity for Brazil, a country where household indebtedness is al-
ready a concern. “The risk of default is not due to the increase in credit but to the lack
of financial education, which is still embryonic in Brazil,” said Fabio Moraes, director of
Financial Education of FEBRABAN.
How to get credit, clear one’s name, and make a budget to go out of the red are the main
concerns of more than 1 million Internet users who have already accessed the financial
education portal of FEBRABAN (www.meubolsoemdia.com.br), launched in April 2010.
“The order of the questions seems to be inverted, but most people actually look for finan-
cial education only when they are unable to pay their debts”, said Fabio Moraes.
The result of this circle is default. Taking it into account, FEBRABAN invested in the
portal, whose main objective is to help people learn how to make a personal and family
budget. Although it seems simple, few do it.
The lack of the habit of making a household budget and lack of knowledge of bank-
ing products disrupt people’s lives and create problems, including for those who live
with the default person. “When things get worse, they turn to their social networking,
whether it’s a neighbor or an elderly, creating a social problem that creates debt to
other people”, said Mr. Moraes.
panel 6 Financial Education for the bancarized population | 59
The next step is to help people save, a subject still not much addressed by the de-
mand of the portal. Initiatives range from cultural contests for people to report how
they managed to achieve their goals by using their savings to tips on how to save a
little every month.
“There are also people who do not want credit in any way, which is beyond the
normal range. After all, thriving on one’s one is complicated”, he stated. The intent
of FEBRABAN is also to show that people can afford investment and use credit to
leverage equity.
In addition to the portal, FEBRABAN has schools for bank training, leadership training,
and specialized courses for strategic audiences, such as lawyers, journalists, and oth-
ers. On November 28, FEBRABAN will be holding a financial education fair, the “Cara-
vana Meu Bolso em Dia” (Catching up with My Budget). The goal is to guide people on
various issues of financial life, such as investing, saving, borrowing, and clearing one’s
name, among others. Mr. Moraes reinforces that all services are free.
60 | I Latin American Financial Education Congress
The risk of default is not due to the increase in
credit but to the lack of financial education,
which is still embryonic in Brazil,” said Fabio
Moraes, director of Financial Education of
FEBRABAN
panel 6 Financial Education for the bancarized population | 61
thE ExPErts’ tiPs tO hAvE succEssfuL fiNANciAL EducAtiON PrOGrAms
· Emphasize the importance of thinking in the long term,
pointing out the benefits of financial planning.
· Prioritize programs that turn information into knowledge
and commitment toward society.
· Financial education cannot be the exclusive responsibility
of banks. It must include several agents to really implement
economy in people’s daily lives.
· Invest in programs that help people go out of debt and bet in
the concept of credit as a stimulus to growth.
panelLearning to save andinvest to prosper
Moderator
Heródoto Barbeiro, Anchor for CBN and Journalist for TV Cultura, Brazil
acadeMy
Antonio Burbano, Professor, Universidad de los Andes, Colombia
private sector
Boris Buvinic Guerovich, General Manager, Itaú Chile
public sector
Sérgio Odilon dos Anjos, Head of the Department of Standards of the
Financial System, Central Bank of Brazil
private sector
Patrícia Quadros, Manager of Popularization Programs, BMF&Bovespa,
Brazil
panel 7 Learning to save and invest to prosper | 63
In this panel, panelists examined household budget and resources management from
the standpoint of the tools necessary for families to develop healthy finances, allowing
family stability and prosperity, taking into account socioeconomic aspects and demo-
graphic interactions.
“Only by respecting the particularities of each stage of the life of an individual we will
be able to help people succeed with an individual or family budget”, said Antonio Bur-
bano, a professor at Universidad de los Andes, Colombia. He leaned over consumer
surveys and social and behavioral indicators to develop personal finance courses that
were really consistent with the daily lives of the families. After doing that, he developed
personal finance courses with strategic partners, focusing on what people want in the
future. “It was a big challenge”, he said.
According to him, the major expenses of Colombian consumers up to 25 years of age
are on clothing, culture, entertainment, and leisure. Over 26 years, housing and food
have a greater weight. Taking into account the data of the survey, the professor believes
he has reached a financial spreadsheet formula that has led people to take control of
monthly expenses. “However, this academic work is meaningless without the support
of financial institutions”, he said.
LAck Of rEGuLAtiON mAkEs iNdEbtEdNEss GrOw iN chiLE
If it depends on the support of institutions, academic papers will be very successful.
Itaú Chile, for example, has invested heavily in financial education, according to Boris
Buvinic Guerovich, general manager of Banco Itaú Chile. In his speech shortly after Mr.
Burbano’s, Mr. Guerovich said that, to achieve developed country’s levels, bancariza-
64 | I Latin American Financial Education Congress
tion and financial education are complementary. “In Chile, we have an interesting ban-
carization level. In families, we have a bancarization level of 50%, well above the 36%
average in Latin America.”
According to him, the high level of bancarization means that Chile has the highest pen-
etration rate of personal loans among the countries in the region and a low default
rate, of only 1.4%, considering arrears over 90 days. “We have a strong, capitalized
financial market, with a not very volatile result, even with 80% of the banking business
coming from loans.”
Unlike Brazil, the card market in Chile is divided between banks and shops, which have
developed their own administration systems. As a result, the Itaú executive sees prob-
lems in the Chilean card market, since both shops and banks release consumer credit.
“In Brazil, issuers and banks are partners, which allows controlling the risk of indebted-
ness. In Chile, it is not possible to warn clients about overwhelming debt as there is no
way to know how much debt they have in shop cards, which ends up creating default
problems, especially among youths.” A survey showed that people between 15 and 29
years of age were indebted. Of these, 57% were considered insolvent.
Due to this scenario, Itaú Chile has decided to invest in guiding and teaching the popu-
lation. Theatre was one of the tools that best fit the proposed financial education for
children between 11 and 14 years of age, with plays performed in public and private
schools. The core values are the commitment to responsibility, ethics, trust, and hon-
esty. “In the future, we intent to broaden the scope of the program and the educational
content for teachers and also to involve the parents”, he said.
panel 7 Learning to save and invest to prosper | 65
thE cENtrAL bANk Of brAziL PriOritizEd thE EducAtiON Of fi-NANciAL iNstitutiONs
In Brazil, the Central Bank seeks to crosscheck data from the financial system to enable
banks to manage the risk of over-indebtedness, said Sérgio Odilon dos Anjos, head of
the Department of Standards of the Financial System of the Central Bank of Brazil.
Financial education is something for all levels of society.
“This is a mission in which the government has invested starkly in recent years, mainly
to take credit from the short and medium term to the long term”, said Angel. According
to him, self-regulation, the requirement of ombudsmen, professional certification ex-
ams, and participation of regulators in the Committee for Regulation and Supervision
of Financial, Capital, Insurance, Pension, and Capitalization Markets (COREMEC) are
some of the initiatives that have helped Brazil grow with financial stability. “There is no
way but to educate financial institutions”, he said. Another initiative was to publish the
fees charged by the banks on the Central Bank’s website, helping consumers to know
the cost of operations and seek the most competitive banks.
AftEr sAviNG, LEArN tO iNvEst
“People have to be willing to fix their budgets. It is not an easy task, mainly because one
is required to spend less. We need to value our dreams”, said Patrícia Quadros, manager
of the Popularization Programs, BMF&Bovespa. Facing the effort to make the popula-
tion control their budgets and save, BMF&Bovespa invests in people who have reached
the level of investors so that they know how to place their bets in order to make the
accumulated resources profitable.
66 | I Latin American Financial Education Congress
The Financial Education Program of the Stock Exchange started in 2002. That year, the
number of investors in the stock market was around 85,000. In July 2010, that number
was 598,352 investors. Most of them were concentrated in the age group between 26
and 35 years. The Program is such a consistent initiative that it has already been pre-
sented as a success story by the World Federation of Exchanges (WFE).
There are various actions, such as Turma da Bolsa (The Stock Exchange Gang), a portal
aimed at children, where over 5,000 children have signed up since its launching. There
is also a program in partnership with TV Cultura called Educação Financeira (Finan-
cial Education), which is divided into two seasons, with a total of 62 episodes based
on everyday examples in Brazil, such as family budget, indebtedness, retirement, chil-
dren education, purchase of a house, and types of investments (savings, CBD, Direct
Treasury, and shares). The average household audience of the TV show, according to
Nielsen, was 58,800 homes, until July 2010.
Women, who are increasingly outstanding in the finance world, gained a portal. Re-
launched in 2009 in a more encompassing version with more content and activities
directed exclusively to women, the portal Mulheres em Ação (Women in Action) al-
ready totals 140,000 hits. The website offers tips and articles on behavior, personal
budgeting, investment, and future.
Another initiative is BMF&Bovespa Vai até Você (BMF&Bovesta Goes to You), where
lectures are delivered to companies, schools, associations, and unions, among others,
with the purpose of demystifying the stock and futures markets and the Direct Treasury
Direct to participants. More than 583,000 people were served since 2002.
panel 7 Learning to save and invest to prosper | 67
thE ExPErts’ tiPs tO stimuLAtE thE wisE usE Of crEdit ANd wisdOm tO iNvEst
· A personal budget is the first step for saving.
· Develop personal finance courses that actually are in line
with the families’ daily lives.
· Develop systems that show the consumer’s general
indebtedness to prevent them from having a high credit
dose, the so-called over-indebtedness.
· Create innovative methods to teach people to invest their
resources wisely and have financial returns that stimulate
reinvestment.
panelResponsible finance,profitable banks
Moderator
Carlos Alberto Sardenberg, Journalist, Rádio CBN, O Estado de S. Paulo, TV
Globo, Brazil
private sector
Leonel Dias de Andrade Neto, President, Credicard, Brazil
public setcor
Adriana Burger, Public Defender and Executive Coordinator of PROCON
Rio Grande do Sul
NGo
Antonino Serra Cambaceres, Consultant, Consumers International
Santiago, Chile
private secto
Marcelo Linardi, Ombudsman Superintendent, Santander Group, Brazil
panel 8 Responsible finance, profitable banks | 69
In this panel, the goal was to promote a discussion on the Financial Culture, Consumer
Rights, and Consumer Awareness in Latin America. The following themes were
focused: “Responsible Finance: transparent and timely communications” and “How
to offer consumers the right product with the right price, while maintaining profitable
financial institutions”.
When it comes to offering consumers the right product at the right price, while main-
taining profitable financial institutions, the credit card sector surfaces. Leonel Dias de
Andrade Neto, president of Credicard, Brazil’s fourth largest manager among private
issuers came to talk about the subject.
In his opinion, there is a change in the indebtedness profile of Brazilians. Vehicles are
the ones expected to grow more due to expensive fees, as well as real estate credit.
“There is much to improve in loans, but it is already much better than it was”, he said.
Loan Bureaus are disappearing. We used to have over 1,000 stores and now there are
150. “It is a change in the consumption type, caused by market development”, said
Mr. Andrade Neto.
He said the trend is that people understand that the credit card revolving balance is not
a good option. This is only recommended for emergency loans due to high interest rates,
unlike other countries where credit card revolving balance is commonplace. In Brazil,
banks advise their customers to seek cheaper credit options than revolving balance.
According to the president of Credicard, Brazil is already close to the limit of healthy
indebtedness. “Income is already committed. The challenge is to move forward with
sustainability. Therefore, it is vital to move on with this process of credit stabiliza-
tion and stretching.
70 | I Latin American Financial Education Congress
Within this scenario, the card industry is going through changes, with increased com-
petition, which benefits come gradually to consumers. With new players, a wider range
of products is reaching the market, making rates cheaper for both merchants and users
of plastic money.
Cards are the main bancarization instrument and, therefore, undergo profound chang-
es. But there is still a long way to go to stop them from being the leaders in complaints.
At Credicard, employees have no financial incentive policies to sell more. Incentives
relate to credit quality. The incentive is not to sell more, but to sell better.”
iN 2011, thE cONsumEr cOdE fOr LAtiN AmEricA
Antonino Serra Cambaceres, consultant for Consumers International Santiago, said
that the crisis prompted the launching of financial education projects in Latin Ameri-
ca. There are data from the region showing that 25% of workers owe more than nine
months and a half of gross income and use 50% of it to pay off debts. That creates, he
said, a need for regulation to control insolvency.
“We tried to collect data to get an overview of Latin America, but many institutions
did not send the contracts”, he said, criticizing the lack of transparency and failure to
respect the rights of consumers, who should receive a copy of the financial products
and services contracts.
The data requested will compose a draft code to regulate the sector in Latin America
and the Caribbean, which text is expected to be released in March 2011, when we cel-
ebrate the World Consumer Rights Day.
panel 8 Responsible finance, profitable banks | 71
Intimidated by being in Brazil, Mr. Cambaceres cautiously stressed that the country’s finan-
cial services sector is the second largest in consumer complaints. He also cited another poor
indicator. Almost 40% of complaints were not solved during the study period, in 2009.
He also cited Argentina, where card use grew 1,330% between 2003 and 2010. The
use, however, is not for explosive consumption of goods, but to finance basic consump-
tion, such as a medicine and grocery stores.
sAy A cLEAr “NO” tO thOsE iN dEbt
Adriana Burger, Public Defender and Executive Coordinator of PROCON Rio Grande do Sul,
found it a good idea to have a Consumer Code in the region. “I wonder if the institutions are
prepared to meet consumers who are aware and participate in financial education courses.”
According to her, the big concern is with those over-indebted, living the tragedy of con-
sumption as a way to feel accepted by the society. For her, institutions are responsible
for putting a brake on this consumption desire, a belief that has generated a controver-
sial discussion among the panelists.
A survey conducted in the South region of Brazil to profile over-indebted consumers
showed that over 70% of respondents were passive, i.e. they did not spend more than
they could, but faced an unexpected problem such as illness, death, or unemployment.
Only 20% were active, i.e. they spent more than they could.
Given this, Adriana suggested that banks should not only control their clients’ indebt-
edness, but teach them how to use financial products. “Banks should say “no” to clients
72 | I Latin American Financial Education Congress
and explain why they are denying credit. That is, instead of charging abusive fees to
dissuade them, say it clear: “you are in debt and, therefore, I will not grant you more
resources. This will raise the client’s awareness. The European Directive that deals with
over-indebtedness shows that this is not a problem only in Brazil, but in the world.”
Marcelo Linardi, Ombudsman Superintendent of Santander Brazil, expert in financial
education, believes that there is no absolute truth. “The same education will produce
different effects on each person. Proof of this is my day to day with my two children.
They have the same education. The boy spends all his money and the girl thinks twice
before spending her allowance.”
One of Mr. Linardi’s concerns when thinking of financial education is to align a set of
social and cultural processes: “Why buy, what to buy, how to buy, who to buy from,
how to use, and how to dispose acquired goods. We must help raise consumers’ aware-
ness on each of these processes so that they can understand the social impact that the
acquisition will generate”, he stated.
Dealing with consumers is the big challenge of Santander. “Consumers need to be more
aware. They want to go to the gym and then eat a box of chocolates. They do not want
credit. They want to buy a car. We need to understand this social and economic dynam-
ics and provide education to all participants in this process: the state, consumers, and
financial agents. Perhaps together, we can actually solve these dilemmas.”
According to Fábio Barbosa, President of Febraban and Santander Brazil, “we must
leave a better world to our children and better children to our world.” This shows the
importance we give to financial education.
panel 8 Responsible finance, profitable banks | 73
thE ExPErts’ tiPs fOr A sustAiNAbLE fiNANciAL EducAtiON
· Offer clients the right product for the right price.
· Train the sales team, which often does not know basic
notions of financial education.
· Make employees of financial institutions aware that
profitability lies in retaining healthy clients in the long term.
· Create sales programs that prioritize portfolio results, not
the volume sold.
· Make everyone aware of the damage caused, including to the
planet, of excessive consumption.
closureLatin American Financial Education Congress
participaNt
Alvir Hoffmann, President, ASBA – Association of Supervisors of
Banks of the Americas, Brazil
Closure | 75
Alvir Alberto Hoffmann, Supervision Director at the Central Bank and President of the
Association of Supervisors of Banks of the Americas (ASBA), said he has the percep-
tion that consumers and investors have improved their understanding on economic
and financial concepts. “We have witnessed throughout the world a strong growth of
product and financial service options. It is prudent to avoid over-indebtedness of in-
dividuals, which might lead to losses for the entire country”, he stressed during the
closure of the Latin American Financial Education Congress, sponsored by FELABAN
and FEBRABAN in São Paulo.
According to him, it is exactly along this line of raising consumers’ awareness that the
association has been developing projects. ASBA’s challenge is also to assist supervi-
sors in developing a regulatory framework that promotes self-regulation as a means to
protect consumers.
The partnership between the regulatory agencies of the 37 countries in the Americas
and the Caribbean is already in practice, exchanging researches and experiences that
allow supervisors to access information and improve their regulatory frameworks. “In
Brazil, we have an environment where interest rates are high from the nominal point
of view, leading to further damage from misuse of credit, which increases default
and, therefore, spread.”
He said that, in this context, the objective is to reduce the risk of indebtedness and im-
prove knowledge of financial products and awareness of what product is best for each
stage of the consumers’ lives. “The role of the supervisor is to ensure that institutions
act in an ethical manner and promote sustainable practices, seeking a fair relationship
with consumers. Financial education is a complementary action to ethics.”
76 | I Latin American Financial Education Congress
cONcLusiON
The Latin American Financial Education Congress, with a diversity of issues and interna-
tional panelists, has contributed to a wider discussion on the topic in the region. After
two days of extensive debate, the message left was that a great step has been taken:
the acknowledgment that financial illiteracy in the region is huge.
The urgent need to train individuals, families, and micro and small businesses to en-
sure an economically healthier future through better financial decisions, seemed like a
mantra among all experts.
The talks have made it clear that the main factors that lead people to a long-term
indebtedness are, on one hand, little or no ability to make financial decisions or take
credit, coupled with a strong demand for consumption. On the other hand, the institu-
tions lack preparedness to grant credit, coupled with the lack of transparency of bank-
ing products and services. Financial education expects also struggle to obtain good
results due to the lack of supply from managers regarding the right product at each
economic moment of the life of the person interested in taking credit.
The financial crisis of 2008, which ruined the public, private, and family budgets, had
a good side. By showing that institutions have given more credit than they should and
that customers have taken more money than they could afford, a global initiative be-
gan to be drawn.
Realizing the detrimental effect of this combination, governments and financial institu-
tions have found that investment in education is urgent to combat financial illiteracy,
Closure | 77
whether to ensure more socially healthy individuals - financial difficulty is the biggest
enemy in family conflict and leads to millions of marginalized youths – or as a key com-
ponent of economic and financial stability.
The issue becomes even more relevant in the context of Latin America, where financial
markets are quickly evolving, both in credit, and savings and capital markets.
With this approach, governments are committed to avoid a crisis like the one in the
United States and Europe. To do this, they have the support of financial institutions, key
players in this new concept of sustainable economic growth and national development.
It also became clear that education is a challenge that involves everyone: government,
schools, financial institutions, and families. The current scenario is a chaos that is be-
ginning to be organized. Long periods of inflation and little respect for consumers have
created a population that hardly thinks of the future and financial institutions that pri-
oritize profit without respecting the rights of consumers and with no commitment to
the social and economic development of the region.
Harassment by the media, encouraging unbridled consumption and nonstop credit of-
fer, exacerbated by strong competition among financial institutions (confirmed by the
constant increase of sales targets for products and services imposed on bank branch-
es), have resulted in irresponsible indebtedness, with serious consequences for growth.
Something had to be changed and the development of Latin economies in recent years
has forced everyone to revisit their strategies.
Today, there is strong demand for banking inclusion, with first-time users, who now
78 | I Latin American Financial Education Congress
have access to financial products that are often complicated even for those who are in the
business. Therefore, the education program provided by financial institutions is a sure path.
Financial institutions are beginning to understand that the more their products and
services comply with the principles of ethics and good faith, more clients they will have
in the long term. The more they train their employees to respect clients and understand
their needs, the greater the financial gain will be thanks to a portfolio of products bet-
ter tailored to each situation and, consequently, healthier. The greater the respect and
consistency in the relationship with consumers, the less regulated financial markets
will be, and vice-versa.
An important step has been to eliminate the sales bonus given to employees. “At Credi-
card, bonus is based on the quality of customer service”, said Leonel Dias de Andrade Neto,
President of Credicard. Another case mentioned in the event that deserves attention is the
renegotiation of the client’s debt through a type of credit with lower interest rates.
That is an initiative that should be reproduced, mainly because the credit card industry
is the gateway to the low-income population in the financial market. It is also one of
the top sources of complaints on the lists of consumer protection agencies in virtually
all Latin American countries.
Despite the efforts of card administrators to change conflicting procedures, much still
has to be done. One example is that even with the ban on sending unsolicited cards, this
practice is still common, according to several speakers. This shows that we still need a
greater awareness among managers of financial institutions and a strong commitment
to education if they intend to build more lasting relationships with their clients.
Closure | 79
Some institutions have already emphasized that they have progressed in the relation-
ship with consumers, installing state-of-the-art programs to cross data and limit credit
to citizens who are already in debt.
A good example of the importance of this measure is the situation that exists in Chile,
a country where retail chains manage their cards in competition with banks. This way
of working does not allow for a database of people in debt. Along with the competition
between the two sectors, the result is an over-indebted population due to credit card.
Such examples underscore the importance of developing educational programs. Public-
private partnerships are vital to achieve this goal. This is an expensive investment, with
immeasurable returns in the short term. Therefore, the more experiences are shared,
the more time and resources will be optimized.
However, we must go further to help a population that is beginning to have access to
consumption and is eager to have everything they dreamed of for years. It is crucial
to invest in education, teaching individuals that spending the necessary and saving a
portion of their income to achieve a future project will be healthier for them and their
families. Being more conscious, individuals will seek to use financial products and time
to their advantage in building assets, generating a virtuous circle of growth not only for
themselves, but also for companies, financial institutions, and the country.
Many projects with investments in programs focused on teaching children, youths,
adults, and even senior citizens are worthy of being copied to spread financial literacy.
We have the case of Banamex, the leading Mexican bank, mentioned on Panel 1, which
shows the benefit of creating sustainable products and training employees to serve as
80 | I Latin American Financial Education Congress
advisers and not merely as salespersons in search of targets to get bonuses.
All speakers emphasized the importance of financial education targeting the middle
class and the most vulnerable consumers, such as those who, unlike those more aware
of their rights, end up suffering the consequences of making wrong decisions.
On this subject, much has been said about the importance of deeply knowing the tar-
get audience. There is no point in investing resources and time in a program that will
not give results, whether by speaking a language that people do not understand or by
using a format that does not fit the reality of the community to be reached.
Many householders, for example, cannot leave work to attend lectures. Monique
Cohen, President of the nongovernmental organization (NGO) Microfinance Oppor-
tunities, mentioned, during Panel 1, a number of choices to reach consumers within
their reality and limitations.
The whole range of resources and media available should be considered to disseminate
financial education and promote the basic concepts of banking products and services,
when the purpose is to teach people to use credit as an instrument of growth. Tech-
nology plays an important role. However, the constant technological changes require
periodic review and adaptation of these projects.
In Brazil, where not even illiteracy has been beaten, access to technological resources is
almost impossible for lower income classes. Personal computers and broadband access
are still very expensive for most people.
Closure | 81
The promises of the Brazilian government aimed at digital inclusion have failed to over-
come the narrow boundaries of political discourse, being practically limited to the estab-
lishment of some popular centers for Internet access and the provision of a few comput-
ers for some public schools. All else comes down to individual actions promoted by some
NGOs and the private sector, insufficient to achieve the expected inclusion.
Considering the experiences mentioned in the two days of discussions, there are many
interesting initiatives, such as the one by Banamex. Due to the diversity of the popula-
tion, the bank has developed several ways to reach its audience, from special inserts
on investment that go in major newspapers to comics for children. In Brazil, we have
the National Strategy for Financial Education (ENEF), a partnership between several
organizations and government. Both show that a public education policy can be writ-
ten by many hands.
Febraban presented the entity’s educational structure, collaborating with the banks
in employees’ training. The entity has shown interesting initiatives being undertaken,
such as the portal Meubolsoemdia with 1 million hits in nine months, Caravana Meu-
bolsoemdia, which will bring on-site financial education to the population, and the fi-
nancial control software, Jimbo.
Febraban also showed a controversial video that highlighted the importance of get-
ting out of the red, as well as saving. It shows a couple who saved nearly 90% of their
monthly income to accomplish a dream. Certainly, to manage to save this percent-
age there must have had someone else paying the bill for the family’s basic expenses.
That is, although the video had the objective of reinforcing the importance of saving,
we have to give more realistic examples to convince people eager for immediate
82 | I Latin American Financial Education Congress
consumption to give up a percentage of up to 20% of their income to make future
dreams come true.
As important as defining the means and forms to be used to achieve the goal of educat-
ing the financial consumers, is the previous definition of the concepts to be measured,
as part of the research project. The event also highlighted the importance of closely
monitoring program outcomes, so as to optimize time and resources and achieve more
efficient patterns of understanding over time.
At Banamex, the project efficiency control begins with recording the programs, fol-
lowed by monitoring participants, students’ satisfaction surveys, use of interface tools
for clients’ responses to measure the results and, finally, an evaluation of changes in
the students’ lives produced by learning.
At the NGO Microfinance Opportunities, one of the strategies for assessing outcomes
is to compare the results from a research conducted prior to the training with the one
conducted 18 months after its completion.
Financial education is not only teaching consumers to take credit, but also to have true
notions of citizenship. It covers planning a project for the future to ensure better living con-
ditions, control of the household budget as a means of ensuring the family’s financial sta-
bility, encouraging savings as a means of achieving dreams of consumption, and learning
financial investment in the market capital to earn profit and ensure a stronger economy.
Microcredit was another topic addressed and it still needs to be deeply studied in Latin
countries, where most of the population lives at the poverty level. It is a particularly
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important issue because it represents plenty of risk and vulnerability for both borrow-
ers and lenders, but it also means, in most cases, the need to implement entrepreneur-
ship in a region.
Because it covers a huge portion of the population, it is vital to invest in research to
better understand these consumers and establish programs to teach them to use the
credit to generate new wealth and change not only their own reality, but also their
social environment, contributing for the region’s economic development.
In this sense, the lesson is that it is not sufficient to grant credit. We must create spe-
cific products that are suitable for every situation, publish them with transparency and
ethics, educate borrowers so that they know the products available, learn to choose
what best fits the specific moment of their life, use credit that is responsibly taken and
to become more aware of the need to plan/manage their budget and save in order to
promote financial stability and consequent economic growth. With that, we will mini-
mize the risks of default and asset portfolios of the institutions will have higher quality.
Panel 8 generated an interesting discussion regarding the need for regulation to con-
trol bankruptcy and the creation of a Consumer Code for Latin America, with release
scheduled for March 2011.
Considering that Brazil already has a relatively new and fairly comprehensive Code of
Consumer Protection (Act 8078 of September 11, 1990), which brings a set of rules
intended to protect consumers and regulate their relationship with service and product
suppliers, the doubt that remains is the usefulness and effectiveness of a similar legisla-
tion, but with continental scope.
84 | I Latin American Financial Education Congress
Remember that, until 2006, when a decision by the Supreme Federal Court finally for-
malized the matter, subjecting financial institutions to the dictates of that law, banks
refused be subjected to the Code of Consumer Protection. The fact is that consumer
protection laws, including consumers of credit products and banking services, already
exists. We must, instead, ensure they are met.
For many years the lack of transparency, subpar customer services, lack of suitable
products, unconscionable contract terms, lack of concern regarding clients and the pre-
cepts of ethics and good faith, and other unsavory practices, drew a negative picture
of credit institutions. The current framework, before the Judiciary and other protection
agencies, always presents clients as victims and banks as villains. In Peru, for example,
in every 10 cases, eight are decided in favor of the clients.
It was shown that, in Brazil, the financial service sector ranks second in consumer com-
plaints, totaling about 40% of unsolved complaints in 2009, the year of the survey.
A material fact, however, is the union of the countries in the development of financial
literacy researches and a common regulatory policy, so that they can incorporate best
practices. The panels highlighted the importance of coherent actions by both parties
to build a healthier system, focused on financial education and improvement of the
relationship between the parties, which, consequently, relieves legal proceedings.
In Peru, for example, the creation of a Regulatory Agency and the requirement that
banks must solve issues within 30 days caused less than 1% of the disputes to be
brought to the regulator. That is, banks resolved 99% of issues and used that experience
to change processes, resulting in a more solid financial system with healthy growth.
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The conclusion is that there is a strong commitment from the Government and private
companies in developing a national strategy that aims to increase the level of finan-
cial education of the population. Government officials and financial institutions have
identified financial education as a necessary condition for financial market efficiency,
as well as a very positive factor for macroeconomic stability.
The main stimulus is that they all agree that “together” they might advance on the sub-
ject and have “guaranteed success” in the long term, at least with regard to having a new
generation that is aware that their actions will build the future they determine today.
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