Why Argentina has the lowest level of bankarization in the region

What are the causes

According to ADEBA, the low level of bank access in the last 20 years is largely explained by the high tax pressure on users of banking services, to which must be added the loss of value of the Argentine pesoturning these two factors into those responsible the sad level of banking.

The document warns that companies and people who use the financial system are subject to a tax charge, national, provincial and municipal, which has no comparison in the region. In addition, “most taxes are “bad taxes” that generate distortions and “waterfall effect on economic activity”.

Among the taxes that affect financial users, the following stand out:

• Taxes about bank credits and debitsknown as check tax
• taxes on gross income for credit operations
• Income taxes for services provided
• Income taxes on liquidity instruments of the BCRA
• stamp duty on cards and other financial operations
• Municipal fees for branches
• municipal fees for ATMs and terminals self-service

Also, apart from taxes, there are withholdings and perceptions of VAT, Earnings and IIBB on payment operationswhich in practice constitute a higher tax burden and discourage the use of financial services.

For the association that brings together the national capital banks of the country, these charges and taxes make credit and payment operations carried out by bank users more expensive and reduce the income received by depositors. “All distortionary taxes, such as ICD, IIBB, Disproportionate municipal taxesend being paid by users of the financial system”, ADEBA warned.

What the 2022 data say

According to the Financial Inclusion Report for the first semester of 2022 of the Central Bank (BCRA), there was progress in the matter. These are the most important data:

• Account ownership approached full coverage of the adult population / In the first half of 2022, 1.3 million people became owners of accounts, which are accessed by 98.5% of the adult population.
• Electronic means of payment (EPM) continued to record records in the first half of 2022 Each adult made, on average, 10.8 monthly payments by electronic means, almost double the payments made in the same period of 2020.
• Savers shifted from highly liquid products to alternatives that offer a higher return / In the second quarter of 2022, the number of fixed terms of individuals in local currency was 1,300 fixed terms per 10,000 adults, which represented a semi-annual increase of 32%.
• During the first half of 2022, the percentage of adults with financing from the expanded financial system (SFA) increased by 2.4 pp