Financial Inclusion of the Poor and Money Laundering Indicators: Empirical Evidence for Colombia

34 Pages Posted: 26 May 2017

See all articles by Hernando Bayona-Rodríguez

Hernando Bayona-Rodríguez

Universidad de los Andes, Colombia - School of Education; National University of Colombia

Catherine Rodriguez

Universidad de los Andes, Colombia - Department of Economics

J. Sebastian Melo

Universidad de los Andes, Colombia - School of Education, Department of Economics

Date Written: March 7, 2017

Abstract

Taking advantage of the largest financial inclusion program in Colombia, we estimate how increasing the access to such services for the poor impacts money laundering indicators in the country. We find that even though, on average, government’s indicators of money laundering activities in Colombia decreased, complex and heterogeneous impacts across the country and in time are observed. While money laundering indicators decreased in areas with high historic values of this crime, indicators in areas with medium historic levels increased. The evidence suggests that after the bancarization process a fragmentation and expansion of money laundering indicators across municipalities in Colombia took place, diminishing the accuracy of the alerts that the financial institutions provide to the government in order to fight this crime.

Keywords: money laundering, bancarization, Souspicios Transaction Report, STR, IIF

JEL Classification: K42, C81, H56

Suggested Citation

Bayona Rodríguez, Hernando and Rodriguez, Catherine and Melo, J. Sebastian, Financial Inclusion of the Poor and Money Laundering Indicators: Empirical Evidence for Colombia (March 7, 2017). Documento CEDE No. 2017-26, Available at SSRN: https://ssrn.com/abstract=2973506 or http://dx.doi.org/10.2139/ssrn.2973506

Hernando Bayona Rodríguez (Contact Author)

Universidad de los Andes, Colombia - School of Education ( email )

Bogotá
Spain

National University of Colombia ( email )

Carrera 30 45-03
Bogota, None
Colombia

Catherine Rodriguez

Universidad de los Andes, Colombia - Department of Economics ( email )

Carrera 1a No. 18A-10
Santafe de Bogota, AA4976
Colombia

J. Sebastian Melo

Universidad de los Andes, Colombia - School of Education, Department of Economics ( email )

Bogotá
Spain

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