La privatización de las pensiones

Figure 7 – BP national coverage – 2009

7.1 Reducing distance and expense

Four hundred and five municipalities included in the BP project were located more than 100 km from the nearest financial centre and in most cases were not connected to these centres by paved roads. For another 75 municipalities, the only access was by boat or small aircraft.23 _{Citizens in these localities had}

to spend time and money to access any financial services including receiving pensions. By combining ICT technology with postal presence in an already existing post office, BP was able to eliminate this costly travel and provide immediate and local access to financial services.

21 _{While Brazilian exports decreased overall during the first semester of 2009, exporta Fácil’s volumes continued to grow.} 22 _{PTC/UPU Info Note on CorreiosNet.}

54

The story of the residents of the small district of Castelo dos Sonhos, in the municipality of Altamira, Pará, illustrates how the simple act of opening a checking account can transform lives. The nearest bank was in Novo Progresso, 158 km by dirt road, impassable in the rainy season. Retirees often spent up to 30 USD, and two days of bus travel, to go to Novo Progresso to draw their pensions. Today, correspondent banks (including BP) in Castelo dos Sonhos enable retirees and others to access their benefits immediately and without extra cost.

7.2 Empowering individuals

Access to financial services represents not only an increase in the value of the retirement payment and pensions (and many other transactions), but also a reduction in the red tape necessary to cash a cheque at a private bank or other finan- cial institution (including opening a high minimum account; BP’s minimum is approximately 3 USD). Furthermore, the ability to cash in or deposit remittances from overseas at BP outlets can reduce the high exchange fees that are some- times charged for this service. Finally, having locally-accessible accounts increases personal security by eliminating the need to keep cash at home or to carry it for long distances from town to town.

More than 88% of BP account holders deposit some funds in savings accounts, thereby earning interest on funds that were previously “hidden in the mattress.” eighteen percent also have checking accounts, a rarity amongst lower-income individuals in developing countries, but just as importantly, a potential source of increased mail volumes used for paying bills.

“eucila” (not pictured) is disabled and receives a minimum social security wage which is supplemented by repairing watches. When BP established a branch in town, eucila opened an account and took a first-time loan of 295 USD to buy shelves and purchase other convenience products for sale in the watch shop. eventually, the first loan was paid off, a second loan taken to further diversify and expand merchan- dise and upgrade eucila’s home; eucila was also considering a third loan to expand the size of the shop.

7.3 Empowering municipalities and regions

BP’s coverage of previously unbanked villages and municipali- ties has been remarkable. In 2002, 1,750 Brazilian municipali- ties were identified as having no banking services; by 2005 BP was operating in 96% of these areas; by 2009, 6,050 BP branches provided access to 14 million individuals. This expanded coverage helps empower villages and municipali- ties in two ways: firstly, by keeping money circulating locally instead of having it flow to distant cities and secondly, by allowing individuals to access money where they live, BP helps support local businesses, eliminates the need to transport expensive goods from large cities, and produces a “multi- plier” benefit for the local economy.

Mairipotaba, a small town of 2,269 inhabitants (2004) in the State of Goiás is nearly 100 km away from the state capital. Before BP arrived, it was following the course of many munici- palities; steadily losing population and income with no pros- pects for growth. When BP opened in June 2002, the payroll of the 235 city employees and the collection of municipal taxes were transferred to the Bank. Soon, funds were avail- able for local farmers who then used them to expand their businesses and increase employment.

By providing access to loans and micro credits for small bor- rowers, BP provides an important stimulus for local SMes and indigenous businesses. Since 2002, BP has granted 1.93 mil- lion loans; loans and credits have been used to open and expand local businesses and are part of the business “virtuous

circle” of investment, expansion, advertising, order fulfill- ment, and bill presentment and payment that strengthens the postal sector and the economy around it. Finally, local access to financial services helps keep local populations sta- ble, since civil servants and others are less likely to be forced to move to another location to receive their monthly income. It should also be remembered that the funds currently held in BP accounts, to say nothing of the funds in other banking correspondents, reflect resources that would not previously have been included in national savings totals nor been avail- able for investment and development.

BP: Flagship product of Brazil’s ICT/Postal network

55