www.ifc.org/thoughtleadership NOTE 54 • MAY 2018 Modelo Peru: A Mobile Money Platform Offering Interoperability Towards Financial Inclusion Like most emerging markets, Peru suffers from low banking penetration and faces challenges to providing financial services. Beginning in 2015, a strategy called Modelo Peru emerged as a collaboration between financial institutions, telecom companies, and the government, with the goal of launching a mobile money platform to better serve the nation’s unbanked and underbanked. The platform’s main innovative feature is interoperability among these three groups to achieve scale and breed competition among e-money issuers. Yet after two years the project continues to struggle to align all involved financial institutions toward its development objective, as well as ramp up the number and value of transactions the mobile platform handles. Important challenges to success include investing in a wider distribution network that more effectively reaches the unbanked, and building a strong digital ecosystem that makes the platform relevant and understandable to users. These challenges require better collaboration from the parties involved as well as strong political will. Absent those, mobile financial services in Peru will remain an alternative financial service rather than a tool for financial inclusion. Emerging markets face various challenges in their attempts Thus, while the infrastructure of attention points has at widespread provision of financial services. Peru is no increased considerably in recent years, disparities among exception. Despite having been one of Latin America’s regions remain significant. Currently, 68.9 percent of Peruvian fastest growing economies between 2010 and 2014, only districts have a financial system presence, 56.4 percent of 29 percent of Peruvian adults own an account in a financial which have access only to agents. Still, 5 percent of the adult institution, far below the regional average of 51 percent.1 population—a group that is among the poorest in Peru4 —has In fact, although it is considered an upper-middle income no access to any kind of financial attention point at all.5 country, Peru’s account penetration is similar to the average In this context, and with almost 70 percent of the of the countries with lowest income and banking interest Peruvian economy having a certain degree of informality,6 rates in the region (33 percent). 2 the preference for cash is very strong. Some 90 percent Among the reasons that Peruvians lack a bank account is of transactions in the country are made in cash.7 The the perception that the costs of maintaining one—including main costs associated with the exclusive use of cash are commission, transaction, and transport costs—outweigh inconvenience (time, transportation, queues) and security the benefits. In rural areas, the average time it takes to (risk of theft and counterfeit currency). access a financial attention point (a financial institution By contrast, the mobile phone market has grown office, ATM, or agent) is 1.5 hours, compared with the considerably and is more widespread in the country. Peru national average of 22 minutes, and just seven minutes on reached a mobile subscriber rate of 66 percent in 2015, average in Lima and Callao Province.3 above Latin America’s average rate of 65 percent.8 1 This publication may be reused for noncommercial purposes if the source is cited as IFC, a member of the World Bank Group. As a result, when officials looked for a logical solution to and challenges of the project, and to gather lessons for Peru’s lack of available financial services, they settled on a other similar cases in the future. broad channel based on mobile phones. However, because The potential impact of mobile money the availability of 3G networks is still limited throughout the country, an inclusive solution required a technology Several countries with low banking penetration rates have that does not require a smartphone or mobile internet.9 created mobile money platforms to promote financial To address its banking issues, the Peruvian government inclusion. The first and most successful case was Kenya’s took a proactive stance, defined by a strong country M-Pesa, primarily used for person-to-person (P2P) commitment and a regulatory environment conducive to remittances. Before that technology became widespread, financial inclusion. And despite its many challenges, Peru most transfers of money were made via cash or informally has been considered as the country with the best enabling through third parties.11 M-Pesa increased per-capita environment for financial inclusion in the world for several consumption levels and brought 2 percent of Kenyan consecutive years, paving the way for creation of a mobile households out of poverty between 2008 and 2014, money platform.10 increasing financial resilience and savings, especially for female-headed households.12 This note examines Modelo Peru’s Billetera Movil, or Bim, “the world’s first fully-interoperable national mobile Access to mobile money reduces both fixed and variable money platform” supported by financial institutions, the costs of transfers and makes consumption smoothing more government, and telecommunication companies to serve effective. It also enables families and individuals to protect the unbanked and underbanked. This innovative model has themselves against shocks such as income and health risks, gained international attention due to its design based on and allows individuals to reach a wider network of social interoperability among the three groups. After almost two support, as physical proximity is not necessary for P2P years in operation, it is useful to understand the advances money transfers. 100 Canada I II Australia Germany France Western Europe Singapore US* 90 Baltics 2014 Formal Banking Penetration (%) 80 China Poland South Africa 70 Brazil East Asia & Pacific Europe and Central Asia (CA) 60 Turkey Kenya Latin America & Caribbean India 50 Argentina Nigeria 40 Mexico Central Asia South Asia Bangladesh 0 30 PERU Sub-Saharan Africa 20 0 Middle East & North Africa 10 Pakistan IV III AVERAGE -2 0 3 4.88 8 13 18 23 2015 Venture Capital Investment per US$10,000 of GDP (Bubble size corresponds to the estimated unbanked population in each country / region.) FIGURE 1 “The Banking-FinTech Development Space”—Peru appears currently in Quadrant IV Peru displays values similar to other countries with high shares of unbanked populations and relatively low activity in venture capital investment, a proxy for the development of technological ecosystems. Source: See Saal, Matthew et al. 2017. “Digital Financial Services: Challenges and Opportunities for Emerging Market Banks.” EM Compass Note 42. IFC, August 2017. *The values for the US are outside the shown scale, i.e. 50 for x-axis and 94 percent for y-axis. The values for Peru are 1.6 for x-axis and 29 percent for y-axis. 2 This publication may be reused for noncommercial purposes if the source is cited as IFC, a member of the World Bank Group. Mobile financial services (MFS) providers are business In Peru, most commercial banks are located in the coastal models as for-profit businesses. They can be mobile network regions, with 59 percent of bank branches located in operators (MNOs) like Vodafone in the case of M-Pesa, or the capital city of Lima. By 2015, only 31 percent of the they can be companies that develop the platform and then districts in Peru had access to the private banking system. partner with MNOs to provide connectivity to end users, In the same year, Banco de la Nación expanded the number as is the case with Pagos Digitales Peruanos (PDP) in Peru. of its branches, ATMs, and agents to increase access to These companies also partner with banks, governments, and financial services by 20 percent. others to allow customers to carry out different transactions, As commercial banks—which hold the vast majority generating a digital ecosystem.13 Regardless of the business of assets in the financial system—do not reach several model, an effective distribution network is critical, including locations in the country, building an inclusive digital a network of agents or franchisees to help customers set up ecosystem necessarily implied working jointly with other accounts and make transactions. Agents are entrepreneurs institutions. In addition, interoperability would also be themselves, as they are paid a commission for every account needed between telecommunications providers (telcos) they open or transaction they facilitate. Customer care, within the platform, since these providers’ mobile network service quality, and cash management depend directly on coverage is just as uneven, with some zones only covered by these actors, which highlights their importance. one provider, and some with no coverage at all. Therefore, Background of Modelo Peru’s creation an inclusive solution implied equal use of the platforms by users from different mobile services providers. In 2013, the Electronic Money Law was enacted in Peru, establishing a legal framework for mobile money to serve In July 2015, Peru launched the National Strategy for as a tool for financial inclusion. The law determined Financial Inclusion, known as ENIF, to allow financial that enterprises authorized to issue electronic money can institutions, telcos, the regulator, and different government be considered either financial institutions or electronic actors to work together. money provider enterprises supervised by the regulator Platform design and business model (Superintendency of Banks, Insurance Companies and Private Pension Fund Managers-SBS). In addition, Also in July 2015, ASBANC launched Pagos Digitales complementary norms were published, such as a Peruanos (PDP), the company in charge of designing, regulation that creates simplified accounts. These accounts maintaining and managing the joint interoperable platform. reduce Know-Your-Client and Anti-Money Laundering PDP’s shares are 51 percent owned by ASBANC’s nonprofit requirements, and can be opened merely by presenting a Center of Financial Studies (CEFI) and 49 percent by the rest valid identity card containing the recipient’s full name and of the electronic money issuers. Telecom companies and the current address. However, they also have limits on account government have an interest in the platform working and are balances (about $600) and transaction size (about $300), critical allies for Modelo Peru and ENIF to advance, but are with total transactions between two parties limited to not part of the decision-making structure of PDP. $1,200 per month. Electronic money provider enterprises, Ericsson won the bid from a group of 22 different money created by the new legislation, can then offer these solutions providers to develop the platform15—named Billetera simplified bank accounts. Movil (Bim) and launched in February 2016—which connects The Peruvian Bank Association (ASBANC) approached banks and telecoms with the unbanked population.16 Over Banco de la Nación—the bank that represents the Peruvian 30 mobile money issuers can operate on the platform, with government in commercial transactions—as well as each generating their own transactions report while having an microfinance institutions and rural savings and credit union intermediary like the PDP settle all transactions.17 representatives, to create a joint interoperable platform large The platform is simple. It connects low-income residents enough to reach the unbanked, and with the potential for to financial services via short message services (SMS) rapid scale. One challenge when deploying such platforms is messaging. The process of signing up and opening an the reluctance to embrace opportunities of open standards electronic wallet is completely free and can take less than a and collaboration, as competition on digital platforms is minute. In addition, all participating financial institutions “asymmetric,” and there is a risk of collaborators competing offer their services through Bim so that the branding effort for each other’s customers (scale versus value leakage).14 can be focused exclusively around the name “Bim.”18 3 This publication may be reused for noncommercial purposes if the source is cited as IFC, a member of the World Bank Group. Bim is innovative and maximizes the reach of all actors on the platform: PROMOTING GOVERNMENT-TO-PERSON • Electronic money issuers: Users can make transactions TRANSACTIONS AMONG THE POOREST within the platform, regardless of the financial The Ministry of Development and Financial institution the other party is working with, without Inclusion is currently working on a pilot to evaluate the potential of digitizing payments for cash commissions for transactions between institutions. Users transfer programs through Bim. The potential don’t need to know what institution other parties are beneficiaries of these programs are among the working with. poorest of the population. Currently, cash transfers • Telecommunications companies: Bim works with Peru’s are made through deposits in savings accounts three main telecommunications companies (Movistar, (where there is a Banco de la Nación office available) or in cash, using transport companies that deliver Claro, and Entel), covering around 90 percent of the the money at a designated place and time. The mobile market, and is coordinating to include Bitel, the latter transfer process is used for around 20 percent telco that holds most of the remaining market share. of the total beneficiaries of Juntos and Pension 65 • Between cash-in/cash-out institutions: Users can reach and implies significantly higher costs both for the government and the beneficiaries (who often must any agent in Bim’s network, regardless of their contract. travel long distances to reach a payment point). Operation of the platform Carolina Trivelli, former Minister of Development and Social Inclusion and former CEO of PDP, believes Users can be individuals or non-financial businesses, this is a positive initiative but is skeptical that it is including government actors, electronic money issuers, a strategy that would build a wide ecosystem to and distribution networks such as agents and certain expand the use of Bim.21 Government-to-person ATMs. Agents perform actions directly with platform operations with the most vulnerable populations users, enrolling new users to Bim, facilitating transactions may reduce costs for government but do not have clear benefits the poor in the short run because (payments, mobile top-ups, and transfers), and performing the remotest areas also do not have any cash-in/ cash-in and cash-out operations. By early 2017, Bim already cash-out points for Bim.22 Furthermore, it could had 8,500 physical points of sale (POS), 19 percent of the take significant time for people with less digital all available points in the country. Most of the remaining capabilities, including the elderly, to adopt the use points are not directly owned by any bank but operate of the platform. through aggregator networks, that is, firms that are Nicolas Besich, Principal Researcher at Videnza allowed to affiliate and manage agents’ operations for more Consultores who conducted a project on the promotion and use of Bim among Juntos than one financial institution. Most of them have not yet beneficiaries in Catacaos, Piura, highlighted joined Modelo Peru.19 that these users’ limited education levels could Users can open an e-wallet account without a preexisting complicate their adoption of Bim. Also, even bank account, Internet access on their phone, or credit. 20 when 77 percent of the users he contacted had a cellphone in the household, less than half of the A new user merely needs to present a personal national actual beneficiaries are effective owners of the identification number, select a passcode, and choose a cellphone. However, the potential reduction in financial institution with which they will create an account. transaction costs related to receiving money would In line with regulation, the money stored in the e-wallet is be significant if the distribution network reaches safeguarded by a trust fund created by each e-money issuer. these populations.23 Other G2P operations may have more potential to The platform allows users to perform the following begin with. These include the National Scholarship operations: Programs, per diem for health workers, salaries • Cash in (mainly through agents), of military personnel based far from their homes, • Cash out (through agents and recently through ATMs of and subsidies for new mothers.24 Subnational government payments, on the other hand, are the banks BBVA and Banco de la Nación), desirable but pose a significant coordination • Make person-to-person transfers, channel given the fragmentation of payment • Buy airtime, and systems and the degree of autonomy over payments policy at the local level.25 • Pay for specific services, e.g., person-to-business (P2B) or person-to-government (P2G). 4 This publication may be reused for noncommercial purposes if the source is cited as IFC, a member of the World Bank Group. Currently, two payment options are possible: and an associated fear of not having someone to contact (1) RUS, a simplified tax for self-employed taxpayers and or provide assistance if something goes wrong. 26 Clearly, microbusinesses payed to SUNAT (National Superintendence substantial financial education is required to help the of Tax Administration); and (2) payments to a technological unbanked become more comfortable with digital payments. institute called TECSUP. Fees are only applied for transfers The implementation of Peru’s National Strategy for Financial and cash-out transactions and are meant to cover the cost of Inclusion by all the parties responsible for it is critical for SMS from PDP to the mobile network operators. Bim to have a proper environment to operate. PDP message Pagos Digitales Peruanos is partnering with Banco de la campaigns need to tackle this by convincing consumers that Nación to provide government-to-person (G2P) operations the new platform offers a simpler way to store money and such as facilitating payments for cash transfer programs to make payments and other financial transactions, but that it the poor (Box 1). In addition, PDP has agreements with some also retains a concrete connection to financial institutions. enterprises to promote supplier payments from shopkeepers Significant progress in this stage of Bim’s rollout would via Bim (business-to-business transactions, or B2B). require agents to succeed, since they are instrumental in Slow Adoption building trust with the local population and instilling confidence in them to use electronic money. However, it has Adoption of the Bim platform has been slow, however. been difficult to work with banking agents that already had Peruvians in general continue to prefer cash transactions, direct relationships with each bank. and they maintain a high level of distrust of financial institutions, which have traditionally been associated Bim’s launch meant twice the work for these agents. They with excessive fees, and the difficulty and inconvenience needed to operate using two separate technologies (phone when needing to solve problems within the system are and point of sale), and had to render accounts twice to the the main reasons for this perception. In addition, there is bank. As agents are not used to working with phones, it took a widespread lack of understanding of electronic money, them twice as long to learn how to operate Bim’s interface, USERS NON-FINANCIAL PERSONS GOVERNMENT P2B BUSINESSES P2G P2P B2B B2P G2P PAGOS DIGITALES INTERMEDIARIES: AGENTS, BIMERS, ATMS* PERUANOS (PDP) • Creates e-wallet account Direct use • Administrates the platform • Cash-in: Receives cash and transfers emoney from its account to the users’ of cellphone • Generates strategic agreements for electronic with telcos and other relevant actors • Cash-out: Transfers e-money from users’ accounts to its own and delivers cash transfers and • Performs bilateral compensation • Facilitates transactions and trains users payments by the end of each day and informs e-money issuers E-MONEY ISSUER • Stores electronic money • Constitutes a trust for the protection of funds Actors • Liquidation of the result of the bilateral compensation Actions • Informs PDP about payments made and received FIGURE 2 Main actors and their activity on the platform Source: Abad, Liliana, Vásquez, Jose Luis and Milton Vega. 2016. “Regulación de Pagos Minoristas: Modelo Peru.” Revista Moneda 168. BCRP (Banco Central de Reserva del Peru); BBVA. 2013. “El marco regulatorio del dinero electrónico en el Peru y la inclusión financiera.” Observatorio Economico— Inclusion Financiera Peru; Antón-Díaz, Pablo, and Tomás Conde. 2017. “Modelo Peru: Unique Model, Unique Challenges, Bright Future.” Brief 001. Center for Financial Inclusion and Institute of International Finance. 5 This publication may be reused for noncommercial purposes if the source is cited as IFC, a member of the World Bank Group. 450 20 300 15 150 10 0 5 JAN APR JUL OCT JAN APR JUL OCT NOV JAN APR JUL OCT JAN APR JUL OCT NOV 2016 2017 2016 2017 FIGURE 3 Number of users in thousands FIGURE 4Average value of transactions in Source: Semana Económica. 2017. “Dinero electrónico: los planes de Peruvian Sol (PEN) la Billetera Móvil en el 2018”. http://semanaeconomica.com/article/ Source: Semana Económica. 2017. “Dinero electrónico: los planes de mercados-yfinanzas/banca-y-finanzas/257808-dinero-electronico- la Billetera Móvil en el 2018”. 20 soles are equal to ca. $6. losplanes-de-la-billetera-movil-en-el-2018/ compared with the use of POS. Also, as Bim is not yet widely To address challenges related to agents using two systems used, some agents routinely forget to charge their phones or instead of one (a cellphone and a POS) and also to add do not prefund their Bim accounts. This generates a self- more attention points for customers, PDP has partnered reinforcing problem: even if there is demand for the use of with Ericsson and three banks: BCP, BBVA, and Banco de the agent, their inability to help potential Bim customers la Nación, to ensure that:29 discourages user adoption of the platform, and this lack of • All BCP agent networks can now be used for cash-in and interest further limits incentives for the agents to use it.27 cash-out operations (approximately six thousand agents), Bim has yet to gain a presence in rural or unbanked areas, • All BBVA agent networks can now be used for cash-in and cash-out operations (approximately 1000 agents), due to the limited number of agents in these regions. and more than 1,800 ATMs can be used for cash-out Historically, banks have not ventured far into rural areas operations, due to high transaction costs and low profit margins. They • All Banco de la Nación agents (6500), ATMs (900), and have been more inclined to prioritize existing networks on branches (600) can now be used for cash out operations. the platform rather than develop new ones, taking advantage of an alternative transaction channel while gathering PDP is piloting a strategy with some small businesses in transactional information from clients. Lima known as “Bimers.” These businesses act as promoters of the platform, creating their own Bim e-wallets, making According to Trivelli, it is especially challenging to cash-in operations in an agent for their wallet, and then accomplish the needed investment from financial institutions performing operations for other people and gaining a small in more agents throughout the country because it is costly to commission for each facilitation. This model is said to be an implement and, after the platform is widely used, they will “uberization” of agents, as it includes promoters that do not be used less.28 In addition, it must be noted that expanding require a license but only an ID to operate. The practice has agent networks is also challenging, as they perform banking been accepted by the regulator.30 services and require a certain size and degree of formality to As for the future, PDP has planned other partnerships to be accepted as agents by the regulator. build a stronger digital ecosystem that will incentivize people PDP has now postponed the goal of reaching unbanked to use the platform more frequently. By April 2018, it is areas immediately and has refocused efforts on peri-urban expected that Bim will be connected connect to the POS areas—where there remains a large proportion of the network of the company working with Mastercard, which population with limited access to the financial system. will enable users to transact with some 80,000 businesses.31 6 This publication may be reused for noncommercial purposes if the source is cited as IFC, a member of the World Bank Group. Other future projects include: incorporating the payment for the success of Modelo Peru, as evidence has shown the of more services such as utilities and international importance of distribution strategies for FinTech solutions. remittances; including the fourth most important telco It is expected that the new approach of “Bimers” will help operator (Bitel) in the platform; and creating a mobile app achieve this more rapidly. for smartphones to bring additional functionality to those In addition, it is critical that a digital ecosystem is users who own one.32 Also, government-to-person and developed, so that the platform is created for various person-to-government operations will be promoted at the transfers and payments. To this end, PDP will need to work national and subnational levels. These operations represent on both the demand and the supply sides. an important opportunity to strengthen the digital Regarding the demand side, campaigns will need to tackle ecosystem, but they will also require strong coordination the negative perceptions of financial institutions, address with the government.33 Engaging and coordinating with the financial literacy issues, and promote the concept and government at different levels is pivotal for PDP to develop convenience of electronic money given the society’s strong the ecosystem required for the use of the platform. preference for cash. In addition, the prevalence of P2P Despite challenges, it is expected that the Bim platform internal remittances within the country is significant in will continue to gain broader use among Peruvians, though Peru and should be seen as an opportunity for Bim. Among progress may continue to be slow. Expansion will be driven the young population involved in internal migration, 38 by growing agent networks and increased use of Bim for percent sent remittances to their former household and 60 government-to-person transactions, which will render it percent received remittances in 2013.34 necessary for certain groups of the population. As to the supply side, PDP is already working on new Bim is still in a nascent stage, and similar platforms have partnerships and strategies, with government-to-person been operation much longer. Kenya’s M-Pesa platform, for being one possibility, as described above. These initiatives example, has been operating for over 10 years. could be complemented with others such as person- to-government (payment of local and national taxes), Conclusion person-to-business (payment for services), and business- The use of mobile money in Peru can help the country to-person (payment of salaries, for example). Different achieve nation-wide financial inclusion, while also increasing incentive schemes could be established to promote the use financial resilience for the poor. Modelo Peru emerged as a of Bim over other channels for these types of payments result of collaboration between financial institutions, telecom (for instance, longer deadlines or discounts when paying companies, and the Peruvian government, in a context where through Bim). All of these initiatives, however, will require financial inclusion was a priority for the government and a strong coordination among several actors in addition to regulatory policy was favorable. political will from different governmental actors. Modelo Peru’s Bim platform is innovative because of its To date, the adoption and popularity of Bim demonstrate interoperability on three levels--government, telecoms, and that well implemented regulation is necessary but not financial institutions. And in contrast to other mobile money sufficient to the success of a mobile money platform. platforms, competition is provided inside the Bim platform Political will and the cooperation of all related actors are and not between platforms. However, interoperability has also critical. also brought the challenge of aligning all relevant parties’ Without ensuring a wider distribution network and incentives. And use of Bim has lagged expectations. developing the required ecosystem, Modelo Peru will likely The primary challenge to more widespread use of Bim remain an alternative financial service where banking among Peru’s underbanked and unbanked in the short run services are already available, instead of effectively is the size and scope of the distribution network throughout promoting financial inclusion for the unbanked and the country. This requires a significant investment on underbanked. However, this platform still has plenty of a distribution network whose use will diminish as the space to mature. If it can address the challenges it faces, platform is more widely used and the money stays in the it has the potential to produce an important development network rather than having the constant need for cash- impact and create a precedent for other interoperable out operations. As challenging as this may be, it is pivotal financial inclusion efforts. n 7 This publication may be reused for noncommercial purposes if the source is cited as IFC, a member of the World Bank Group. ABOUT THE AUTHOR Principal Investment Officer, Andean Region, Latin America Paola Elvira Del Carpio Ponce, Research Assistant, Thought & Caribbean Region, IFC; Matei Dohotaru - Financial Sector Leadership, Economics and Private Sector Development, Specialist - Finance, Competitiveness & Innovation – World IFC. She has worked as a Senior Consultant in AC Publica Bank; and Thomas Rehermann, Senior Economist, Thought (Lima, Peru), advising the Peruvian government on public Leadership, Economics and Private Sector Development, IFC. management issues related to policy design and management, and evaluation of social programs, including projects related to PREVIOUS EM COMPASS NOTES ABOUT FINTECH competitiveness for better public and private investment, and Please see also these IFC Thought Leadership publications the reform of institutional arrangements of public institutions. about trends for fintech companies in emerging markets: EM (pdelcarpioponce@ifc.org; paodelcarpio@gmail.com) Compass Notes How Fintech is Reaching the Poor in Africa and Asia: A Start-Up Perspective (Note 34); Digital Financial ACKNOWLEDGMENTS Services: Challenges and Opportunities for Emerging Market The author would like to thank the following colleagues Bank (Note 42); Blockchain in Financial Services in Emerging for their review and suggestions: Matthew Saal, Head, Markets Part I (Note 43); Blockchain in Financial Services in Digital Financial Services, Financial Institutions Group, IFC; Emerging Markets Part II (Note 44) and the report Blockchain: Eduardo Wallentin, Senior Manager, Country Economics and Opportunities for Private Enterprises in Emerging Markets Engagement, IFC; Marc Tristant De Laney, Country Head and (October 2017). 1 World Bank Global Findex Database. 2014. http://www.worldbank.org/en/programs/globalfindex 2 See classification by GSMA of commercial mobile financial services in Latin American and the Caribbean. Type I Markets (low income, low interest rates) under this classification are Bolivia, El Salvador, Guatemala, Nicaragua, and Paraguay. Under this classification, Peru is considered a “hybrid” since it has similar account penetration rates but higher GDP per capita than these markets. 3 SBS (Superintendencia de Banca, Seguros y AFP). 2017. “El sistema financiero está presente en casi el 70% de los distritos del Perú.” SBS Informa: Boletín Quincenal Nro.12. July 2017. 4 SBS (Superintendencia de Banca, Seguros y AFP). 2016. “Perú: Indicadores de inclusión financiera de los sistemas financiero, de seguros y de pensiones.” December 2016. 5 SBS (Superintendencia de Banca, Seguros y AFP). 2017. “El sistema financiero está presente en casi el 70% de los distritos del Perú.” SBS Informa: Boletín Quincenal Nro.12. July 2017. 6 ILO (International Labor Organization). “Key Indicators of the Labor Market.” ILOSTAT - ILO database of labor statistics. http://www.ilo.org/global/ statistics-and-databases/lang--en/index.htm 7 Quevedo, Vladimir and Javier Pereda. 2017. “Información sobre el uso y conocimiento del efectivo para gestión en la Banca Central.” Revista Moneda. BCRP (Banco Central de Reserva del Perú). March 2017. 8 GSMA Intelligence. 2016. “The Mobile Economy: Latin America and the Caribbean 2016.” It must be noted that there is great variance among the region’s countries’ unique mobile subscriber penetration, going from as low as 28% in Cuba to as high as 92% in Chile, Uruguay and Argentina. 9 Lewis, Robin J., John D. Villasenor, and Darrell M. West. 2017. “The 2017 Brookings Financial and Digital Inclusion Project Report: Building a Secure and Inclusive Global Financial Ecosystem.” Center for Technology Innovation at Brookings. 10 Ibid. 11 Jack, William and Tavneet Suri. 2014. “Risk Sharing and Transactions Costs: Evidence from Kenya’s Mobile Money Revolution.” American Economic Review Vol. 104 (1); Alexander, Alex J., Lin Shi and Bensam Solomon. 2017. “How Fintech is Reaching the Poor in Africa and Asia: A Start-Up Perspective.” EM Compass Note 34. IFC, April 2017; McKay, Claudia and Rafe Mazer, “10 Myths About M-PESA: 2014 Update,” CGAP blog, October 1, 2014. http://www.cgap.org/blog/10-myths-about-m-pesa-2014-update 12 Suri, Tavneet and William Jack. 2016. “The long-run poverty and gender impacts of mobile money.” Development Economics Vol. 354 Issue 6317. 13 World Bank. 2017. “Mobile Money: Transforming Financial Inclusion.” Inclusive Innovations. June 2017. 14 GSMA. 2017. “The Mobile Economy 2017.” 15 Antón-Díaz, Pablo, and Tomás Conde. 2017. “Modelo Peru: Unique Model, Unique Challenges, Bright Future.” Brief 001. Center for Financial Inclusion and Institute of International Finance. 16 Banking Tech. 2015. “Ericsson to Connect Banks, Telcos and the Unbanked.” http://www.bankingtech.com/382671/ericsson-to-connect-banks-telcos- and-the-unbanked/ 17 Trivelli, Carolina. 2017. “Modelo Peru.” Interview by Paola del Carpio. (September 12, 2017). 18 Bim (Billetera Móvil). “¿Cuánto cuesta usar Bim?” https://mibim.pe/tu-billetera-movil/cuanto-cuesta-usar-bim/ 19 Antón-Díaz, Pablo, and Tomás Conde. 2017. “Modelo Peru: Unique Model, Unique Challenges, Bright Future.” Brief 001. Center for Financial Inclusion and Institute of International Finance. 20 Ibid. 8 This publication may be reused for noncommercial purposes if the source is cited as IFC, a member of the World Bank Group. 21 Carolina Trivelli is a Peruvian economist specialized in social policy, rural development, and financial inclusion issues. She is a senior researcher at the Peruvian think tank Instituto de Estudios Peruanos. She is also Chair of the Consultative Group to Assist the Poor (CGAP) housed at the World Bank, and chair of the board of Pagos Digitales Peruanos, the company that runs the interoperable platform for electronic money in Peru. Trivelli was the first Minister of Development and Social Inclusion in Peru (2011-2013). 22 Cash transfer programs reach areas in Peru where there is no bank coverage at all. In these cases, the transfer is made at a central point for different areas at a certain day and time. It is costly for the government because it must contract a security company that physically transfers cash. It is also costly for users because some of them must travel very long distances. 23 Besich, Nicolás, interview by Paola del Carpio. 2017. “Promotion and use of Bim among Juntos beneficiaries.” Videnza Consultores. 24 Trivelli, Carolina. 2017. “Modelo Peru.” Interview by Paola del Carpio. 25 See: Better Than Cash Alliance. 2016. “Building from a Strong Foundation: A Path Forward for digitizing Sub-national Government Payments in Peru.” 26 FEPCMAC (Federación Peruana de Cajas Municipales de ahorro y Crédito). 2016. “Las cajas municipales y el dinero electrónico: uso de Bim.” Caso Estudio. 27 Antón-Díaz, Pablo, and Tomás Conde. 2017. “Modelo Peru: Unique Model, Unique Challenges, Bright Future.” Brief 001. Center for Financial Inclusion and Institute of International Finance. 28 Trivelli, Carolina. 2017. 29 This information was provided by Jessica Salazar, Ecosystem Development Chief of Pagos Digitales Peruanos (PDP). 30 Better Than Cash Alliance. 2016. “Modelo Peru Webinar.” www.betterthancash.org/news/blogs-stories/modelo-peru-webinar. 31 Provided by Jessica Salazar, Pagos Digitales Peruanos. 32 Better Than Cash Alliance. 2016. “Modelo Peru Webinar.” www.betterthancash.org/news/blogs-stories/modelo-peru-webinar. 33 Better Than Cash Alliance. 2016. 34 Franco Gavonel, Maria. 2017. “Patterns and Drivers of Internal Migration Among Youth in Ethiopia, India, Peru and Vietnam.” Young Lives Working Paper 169. Oxford. 9 This publication may be reused for noncommercial purposes if the source is cited as IFC, a member of the World Bank Group.