Don't give a man fish nor teach him to fish. ¡Finance the purchase of the fishing rod! Contesting financial inclusion in Argentina.

TOMAS NOUGUES

Saint Louis

Congreso; Financial Capability and Asset Building: Achievements, Challenges and Next Steps (2020?2025); 2020

Washington University

Recently, Argentina´s policy makers incorporated financial capability and asset building as policy aims in concordance with international agendas. Drawing on the experiences of local government with microcredit programs, the experts adopted credit as a key policy instrument to address multiple social issues such as unemployment, low consumption rates and housing deficit. This paper intends to explore the financialization of Argentina´s contemporary social policy in order to assess its main implications and consequences. By this, it pretends to contribute to the empirical research of a key aspect of social inequality: the access to the financial system, and particularly to credit, of the more vulnerable groups of society. The main objective is to study the current policies that employ financial dispositfs which are targeted to the poor.To achieve this, the paper proposes a methodological approach that combines quantitative and qualitative methods. First, it analyses the degree of access to financial services and credit of vulnerable groups. Drawing on data provided by the first Argentina´s Nacional Survey on Social Structure, which includes a specific section on Banking and Access to Credit, the first section of the paper analyses the inequalities on the access to financial services in order to provide insights of the current situation of financial inclusion in the country. The analysis shows that employment status, poverty, gender and age are key aspects to understand the determinants of financial inclusion in Argentina.Second, to assess the scope of the financialization of Argentina´s social policy the paper studies three local social programs that attend to three major social life´s areas: production, consumption and housing. This section focuses on analyzing the design, normative content and implementation of these programs. The first case is the "National Microcredit Program" which finances IMFs that provide microcredit to poor entrepreneurs. The second is the "National Agency of Social Security Credits" that provides personal loans to social policies beneficiaries. Finally, "Improve Your Home" is a program that finances house improvement and connection to public services.In the light of the assessment of the determinants of unequal access to credit and the evaluation of these social programs, the last section reflects on the implications and limitations of the employment of credit, hence the establishment of a debt relation, as an instrument of policies aimed to the financial inclusion of the poor. The paper poses that the use of credit generates a series of transfers and delegations to the beneficiary (costs, responsibility and risk) that can produce effects contrary to those sought by the policy makers. The increment of the debt burden fostered by these programs is not always the best strategy to address the social needs of the most vulnerable social groups that tend to be already highly indebted. In that sense, this paper proposes a series of elements in order to rethink Argentina?s current financial capability and asset building policies orientation.