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Citizenship can be understood as a set of rights and duties exercised by individuals. One of these rights is social welfare, which is materialized through access to resources that have been financialized over the last 300 years.
In order to access financial resources in the direction of a full economic life, the first step is to financial inclusionThis is a topic that we have often addressed in this space. Financial inclusion takes place through the visibility of the individual in the financial system, either through bankarization or through the Biros de Crédito databases, which are used for consultation during the credit granting process.
Financial inclusion was boosted during the pandemic with the payment of emergency aid and the advances made by the Positive Registry have been fundamental for the inclusion of the unbanked in the credit analysis system by sharing the payment history of the telecommunications and utilities sectors.
Once access to financial resources has been obtained, the importance of financial education becomes even more evident. It is essential to know how to manage resources efficiently and effectively in order to achieve goals and meet people's needs. The benefits of financial education materialize through citizens' attitudes and habits in relation to financial resources. More than just knowing the concepts, it is essential to know how to apply them in practical life.
Various financial education initiatives have been gaining ground in the country, such as the Central Bank's Financial Education Program, the platform My Pocket of Febraban, of which the credit bureau sector is a collaborator, the inclusion by the MEC of Financial Education in the National Common Curriculum Base, in addition to the numerous initiatives produced by the credit bureau sector for different public profiles.
From a regulatory point of view, it is up to the state to provide all the legal framework and mechanisms for resolving conflicts in the financial ecosystem, in order to bring those involved closer together. As such, the Financial Citizenship is achieved with the inclusion of individuals who, in turn, being financially educated and with responsible attitudes and habits, begin to contribute to improving the regulatory framework and conflict mechanisms through active participation in debates and public consultations.
The concept of financial citizenship has been gaining ground precisely to remind us that in relationships with financial institutions and in credit operations, consumers also have obligations and rights. This discussion has been maturing over time. In its publication Financial Citizenship Day, the Central Bank of BrazilIn his presentation of the 1988 Constitution - known as the Citizen Constitution - he presented its antecedents: the macroeconomic stabilization achieved from the 1990s onwards; the expansion of access to credit in the 2000s and the recent impetus given to the issue of financial education.
In partnership with various civil society actors, including credit bureaus, the Central Bank of Brazil has made efforts to expand financial citizenship in the country. Some of the results can be seen in the recently released Financial Citizenship Report 2021. This document provides important data on the evolution of access to financial services between 2018 and 2020.
According to the report, the percentage of adults in relationships with financial institutions reached 96% in 2020.
The credit bureaus was represented in the discussions on the definition of financial citizenship as one of the stakeholders. The sector's actions aimed at financial citizenship continue, through the banners of conscious consumption and responsible credit.
The sector has been working to inform the population about an important instrument for financial inclusion, citizenship and control of market risks: the credit rating. A recent survey showed a significant increase in the percentage of Brazilians who know about this instrument, although there are differences between different socio-demographic groups. Knowing how the credit score works, where to consult it and how to improve it is a right for anyone seeking credit, whether they are an individual or a company.
Consumers have an increasingly wide range of financial products and services at their disposal. Innovation has been constant in this segment - encouraged even by regulatory bodies - with great potential for inclusion. This was another topic highlighted in the financial citizenship report and will be the subject of the next article.
Financial citizenship
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By: Elias Sfeir President of ANBC & Member of the Climate Council of the City of São Paulo & Certified Advisor
