Digital financial inclusion in Latin America: An application of classification models

Digital financial inclusion is crucial for economic and social development in Latin America, where access to basic financial services is limited and the informality in the economy has been reluctant to decrease. This paper uses a novel methodology for classified individuals according to whether or not they have a mobile account (also known as e-wallets) based on their socio-economic characteristics, the holding of other instruments, and the country of origin among four Latin American nations (Argentina, Brazil, Colombia, and Peru) in 2021. Mobile accounts fostered inclusive growth, reduced transaction costs and geographical constraints, and were boosted in the post-pandemic era. The objective is to identify the most relevant attributes of mobile account ownership to improve digital financial inclusion. For the classification, the results highlight age and income as relevant but also owning a debit card, accessing the Internet at home, and having saved in the last year as significant factors leaving behind the country of origin (meaning that they are very alike) or typically relevant attributes for traditional finance like education or gender.