Objective: Bringing Banking to All Rural Areas

In October 2022, the three banking employers’ associations (AEB, CECA, and Unacc) signed the so-called Roadmap to Strengthen Financial Inclusion in Rural Areas, offering solutions to ensure access to banking services in all Spanish municipalities. According to the two monitoring reports just released, significant progress has been made, with a notable decrease in the population that lacks a physical access point to banking services in their municipality of residence.

In the annual monitoring report, there was a 25% reduction in the financially excluded population, meaning that 162,641 individuals who lacked a physical access point at the end of 2021 now have one by the end of 2022. This decrease implies that the financially excluded population has dropped from 1.4% to 1% of the Spanish population. A total of 443 municipalities have been removed from the list of those facing accessibility issues.

The roadmap proposes different measures based on the municipality size, with solutions tailored for those with less and more than 500 inhabitants. In the first case, the most significant decrease in financial exclusion has been through bus services, followed in importance by ATMs. In contrast, in municipalities with more than 500 inhabitants, the most effective solution has been ATMs, followed by financial agents and agreements with Correos. These results align with what was established in the roadmap.

In the financial inclusion diagnosis conducted using data from December 2021, 243 municipalities with over 500 inhabitants were identified as lacking any access point to banking services. These municipalities have received special attention to quickly correct the accessibility problem. The latest quarterly monitoring report, using data up to March 31, 2022, shows the substantial progress made in the 15 months that have passed, with the number of excluded municipalities dropping by 35% (from 243 to 159), accompanied by a similar 35% reduction in terms of the excluded population.

Considering that since March, agreements have been signed and tenders issued to install new ATMs in these municipalities (especially in Castilla y León), an additional 55 municipalities are expected to be removed from the excluded list, resulting in a cumulative 58% drop in the population without financial accessibility in their municipality of residence. Thus, there are 139 municipalities where 123,278 people have benefited from the commitments outlined in the roadmap.

With these significant advancements outlined in the roadmap, the financial inclusion map is progressing well, and the pace is understandably faster in areas that previously faced greater accessibility issues. Notable improvements have occurred in Castilla y León. It is in the smallest municipalities (with fewer than 100 inhabitants) that the accessibility problem is most pronounced (43.8% of the excluded municipalities have fewer than 100 inhabitants, and 93.4% have fewer than 500), and it is in these municipalities that the number of excluded individuals has seen the greatest decline.

In summary, the necessary restructuring that the Spanish banking sector has undergone to improve its efficiency has required a significant adjustment in the network of offices and ATMs. However, due to the sector’s commitment, the percentage of the population facing financial accessibility issues has decreased from 1.4% to 1% in just one year, benefiting 162,641 individuals.

Joaquín Maudos is a professor of economics at the University of Valencia, deputy director of Ivie, and a collaborator of Cunef.