Juan Palacios: Financial exclusion: a threat to vulnerable groups

One of the terms that is most used when fighting inequality is social exclusion associated with the lack of economic resources or essential services, such as education, health or communications, but there is another series of services that are not traditionally perceived by citizens as basic and that are fundamental in the daily lives of families, companies and society itself. It’s about financial services.

Its lack has already been considered as another form of exclusion, in this case ‘financial exclusion’, understood as the problems of certain people and companies in accessing various financial products and services and which has been increased by the closure of offices and ATMs. throughout the national and regional territory as a consequence of the 2008 crisis.

Before that year there had been a time of expansion of the network of entities throughout the country. With the arrival of the financial crisis, a major banking restructuring was necessary, both in the number of entities and in the number of offices and ATMs, which affected almost all banks except for some entities that did not depend on foreign countries and had healthy accounts and its headquarters and roots in the territory, as is the case of Caja Rural de Extremadura.

41% of Extremaduran bank offices closed

In Spain, from 2008 to December 2022, the closure of a total of 28,059 bank offices has been recorded, which is 61% less than before the crisis. If we look at the number of ATMs, the reduction in those 14 years has been 27% with 16,481 fewer ATMs throughout the country, according to data collected by the IVIE and the University of Valencia.

Regarding the figures for Extremadura, in September 2008 there were a total of 1,196 offices that were reduced to 660 in December 2022 (41% less), which meant the closure of 536 offices in 14 years. The province of Cáceres, with a smaller population and smaller municipalities, is the one that suffered the most from the consequences with the loss of 61% of its branches (275 fewer) while in the province of Badajoz they lowered the blinds by 35% (261 fewer offices). .

Data that contrasts with that of Caja Rural de Extremadura, which during this period has not seen the number of branches reduced, but rather has increased it slightly, something that is possible given that the origin of this cooperative credit entity is to seek profitability social, with a way of doing business focused on closeness and trust, not on balance sheets.

If we continue analyzing the existing data, the closure of offices has been proportionally higher in population centers with more than 10,000 inhabitants, which have seen their supply reduced, but not eliminated. When the closure has been in small municipalities, the consequences have been greater given that residents have found that they have been left without an office or ATM, which means limitations in their daily lives.

Groups vulnerable to exclusion

Immersed in the digital era, it could be said that fewer offices does not necessarily imply that access to financial services is limited, since electronic banking is a tool that is becoming more widely implemented every day, but the problem occurs with certain groups. ‘vulnerable’ and do not have access to these instruments, which can be a threat when receiving a basic essential service.

Older people, people who do not have digital knowledge, groups that reside in municipalities without internet access or who do not have a computer or smartphone are vulnerable and require special attention because with the closure of the office and the ATM they may find themselves excluded. financially, something that, due to the characteristics of population density, dispersion and aging, can especially affect Extremadura.

Public-private cooperation against financial exclusion

To fight against discrimination against these vulnerable groups, Extremadura is working through public-private cooperation to implement tools that allow access to banking services in the region, either with offices or state-of-the-art ATMs that facilitate necessary day-to-day transactions, such as depositing or withdrawing money, paying bills or recharging a mobile phone, among others.

In this way, the regional Administration and the provincial councils have launched a ‘financial inclusion’ plan that allows access to banking services in those small municipalities that are deprived of this service in the region and to which, as could not be Another way, Caja Rural de Extremadura has joined.

In this way, we have promoted the implementation of 32 financial service points for municipalities that did not have it or that lost it with the crisis.

Unlike the large banks, Caja Rural de Extremadura has not seen a reduction in the number of offices in the region since 2008, but rather has increased them slightly and has become the Extremaduran entity with the greatest territorial presence by having a network of 110 offices distributed throughout the autonomous community.

This network favors access to financial services in a close and personalized way for citizens, adjusted to the needs and knowledge of the territory, something that is possible because cooperative credit entities mainly have social profitability in their DNA, and not only the economy.

In short, it is the responsibility of entities such as Caja Rural de Extremadura to offer citizens basic services on a daily basis, such as the possibility of making transactions, payments, savings, credit or insurance, among other things. You don’t have to look at or measure the macroeconomic figures so much, but rather put a face to the people who are in front of a counter requesting that a vital service be provided to them. Credit cooperatives are not mere dispensers of banking products, but rather we are a vital instrument that is fully involved in the fight against financial exclusion, social development and supporting vulnerable groups that may be threatened. Our commitment is clear to the inclusion of everyone.