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Financial Inclusion and Exclusion Risks in Dominican Republic: Ageism in Banking Sector
Ageism in Financial Services
A staggering 30% of respondents over 65 years old in the Dominican Republic admit to facing challenges accessing financial products due to their age, a survey reveals. The country’s financial services sector has been criticized for practicing ageism, with some institutions refusing loans to customers above 70 years old.
A Personal Story of Struggle
The case of Altagracia Santana, a 73-year-old woman from a small town in the Dominican Republic, highlights the severity of this issue. After losing her job and struggling to qualify for a pension, Altagracia started her own food business. Despite her determination, she was denied credit by several financial institutions due to her age. Faced with no other option, she borrowed $5,000 from an informal lender, paying steep interest rates that eat into her profit.
The Consequences of Ageism
The story of Altagracia is not unique in the Dominican Republic. Many older people struggle to access credit and digital products and services, often due to their age. In fact, a technological error prevented Altagracia from making a mobile payment, highlighting the need for user-friendly interfaces and effective customer support.
Solutions
Regulators and policymakers can take steps to address this issue:
- Financial institutions could ensure that customers’ risk profiles are assessed considering factors beyond just age.
- Designing new financial products and services that cater to older people’s unique needs could help bridge the gap.
Promoting Financial Literacy
Promoting financial literacy and creating a culture of saving are also essential elements in preparing populations for old age:
- Financial education programs can equip the elderly with the necessary skills to choose and use financial products and services appropriate to their needs and economic capacity.
The Importance of Inclusion
In the Dominican Republic, life expectancy is projected to reach 79 by 2030, up from 74 in 2020. Older people represent a vital part of society, and regulators and financial service providers have a responsibility to protect this sector and prioritize their financial inclusion. By doing so, they can ease the burden of growing old while sustaining economic activity among elderly sectors of the population.
A Global Problem
The Dominican Republic’s experience serves as a reminder that ageism in the financial services sector is not unique to the country. Policymakers worldwide must take action to address this issue and ensure that older people have equal access to financial products and services.