Institutional Program 2020-2024 of Banco del Bienestar, Sociedad Nacional de Crédito, Development Banking Institution

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DOF: 03/03/2021

INSTITUTIONAL PROGRAM 2020-2024 of Banco del Bienestar, Sociedad Nacional de Crédito, Development Banking Institution

Banco del Bienestar.

Institutional Program 2020-2024

Banco del Bienestar, Sociedad Nacional de Crédito, Development Banking Institution

INSTITUTIONAL PROGRAM

DERIVED FROM THE NATIONAL DEVELOPMENT PLAN

2019-2024

Index

1.- Legal basis for the preparation of the Program

2.- Acronyms and abbreviations

3.- Source of resources for the implementation of the Program

4.- Analysis of the current state

5.- Priority objectives

5.1.- Relevance of Priority Objective 1: Foster greater financial inclusion through access and use of useful, affordable, and quality financial products and services, strengthening access to financial education and training, as well as promoting schemes that trigger the strengthening of the Bank's service sector and local financial ecosystems.

5.2.- Relevance of Priority Objective 2: Expand productive development schemes, facilitating access to financial services in strategic sectors, through the development of first and second-tier placement strategies.

5.3.- Relevance of Priority Objective 3: Ensure the effective exercise of the constitutional right to economic support, pensions, scholarships, and other social programs through the expansion of mechanisms for money dispersion, promoting its financial sustainability and the reconstruction of the social fabric.

5.4.- Institutional alignment with PRONAFIDE

6.- Priority strategies and specific actions

7.- Goals for well-being and parameters

8.- Epilogue: Vision towards the future

1.- Legal basis for the preparation of the Program

The Institutional Program of Banco del Bienestar is based on the content of the Institutional Programs that National Credit Societies must prepare, in compliance with what is provided in:

i.

The Political Constitution of the United Mexican States:

a)

Article 26.

ii.

Planning Law:

a)

Article 2.

b)

Article 4.

c)

Article 12.

d)

Article 14.

e)

Article 16.

f)

Article 17.

g)

Article 22.

h)

Article 24.

i)

Article 26 Bis.

j)

Article 29.- third paragraph.

k)

Article 30.

l)

Article 31.- second paragraph.

iii.

Federal Law of Para-State Entities:

a)

Article 47.

b)

Article 48.

c)

Article 49.

d)

Article 59.

iv.

Regulation of the Federal Law of Para-State Entities

a)

Article 15.

b)

Article 22.

c)

Article 27.

v.

Credit Institutions Law

a)

Article 31.- second paragraph.

vi.

The Guidelines:

a)

Criteria for preparing, dictating, approving, and following up on programs derived from the National Development Plan 2019-2024.

b)

Guide for the preparation of programs derived from the National Development Plan 2019-2024.

2.- Acronyms and abbreviations

BANXICO:

Bank of Mexico

BANSEFI:

National Savings Bank and Financial Services, National Credit Society,

Development Banking Institution.

Banco del Bienestar:

Banco del Bienestar, National Credit Society, Development Banking

Institution.

BIDES:

Deposit Notes

CNBV:

National Banking and Securities Commission.

CONAVI:

National Housing Commission.

CONSAR:

National Commission of the Retirement Savings System

CDI:

National Commission for the Development of Indigenous Peoples.

CONEVAL:

National Council for the Evaluation of Social Development Policy.

CONAPO:

National Population Council.

ENIF:

National Financial Inclusion Survey.

ENAFIN:

National Enterprise Financing Survey.

ENAPROCE:

National Survey on Productivity and Competitiveness of Micro, Small and

Medium Enterprises.

SWOT:

Strengths, Opportunities, Weaknesses and Threats.

INM:

National Institute of Migration.

LACP:

Popular Savings and Credit Law.

LRASCAP:

Law to Regulate the Activities of Savings and Loan Cooperative Societies.

MIR:

Results Indicators Matrix.

MSMEs:

Micro, Small and Medium Enterprises.

SDGs:

Sustainable Development Goals.

PAHNAL:

National Savings Trust.

SMEs:

Small and Medium Enterprises.

PND:

National Development Plan.

PNIF:

National Financial Inclusion Policy.

REFIN:

Refinancing Program for credits for education workers via

payroll deduction.

PROIIF:

Comprehensive Financial Inclusion Program.

PRONAFIDE:

National Development Financing Program.

Sector Network:

Commercial alliance between Popular Savings and Credit Sector Societies and

Cooperative and Banco del Bienestar.

SACP:

Popular Savings and Credit Sector.

SACPyC:

Popular Savings and Credit and Cooperative Sector.

SHCP:

Secretariat of Finance and Public Credit.

POS:

Point of Sale Terminal.

3.- Source of resources for the implementation of the Program

All actions considered in this Program, including those corresponding to its

Priority Objectives, Priority Strategies and Specific Actions, as well as inter-institutional coordination

labor for the implementation or operation of said actions and the follow-up and reporting of the

same, will be charged to the authorized budget of the spending executors participating in the

Program, while it is in effect.

4.- Analysis of the current state

4.1. Problem addressed by the program

As a result of the implementation of public policies during previous administrations, the diagnosis

and identification of areas for improvement regarding the service sector of Banco del Bienestar is described in this

section.

Low penetration of the formal financial system in medium, high, and very high marginalization zones.

According to the National Financial Inclusion Policy, issued in June 2016, there are

different challenges in terms of financial inclusion in Mexico. In that document, it is mentioned that

" The

infrastructure and supply of financial services are insufficient to serve the entire population due to

the fact that it tends to concentrate in urban areas and in municipal seats, which limits access

of the population in rural and smaller localities. "

• In Mexico, there are 1.4 branches per 10,000 adults. In comparison, Spain has

5.9

branches, USA with 3.1, Honduras with 2.0, Brazil 1.89 and Colombia 1.5 (Fintex, 2017).

• At the end of 2018, 17,290 branches were registered, of which Multiple Banking participates with

77%, the SACP with 19% and Development Banking with 3% (CNBV, 2019)

• Likewise, in rural municipalities (fewer than 5,000 inhabitants), only 8% have at least one

branch, 12% have a correspondent, and 21% have at least one POS (CNBV, 2019).

Vulnerability on the part of the service sector of Banco del Bienestar against eventualities

(accidents, illnesses, death).

According to data from the 2018 National Financial Inclusion Survey, around 25.1 million

adults only use informal savings mechanisms, a number lower than the number of adults who turn to the

formal financial system to save (12.3 million). Likewise, almost 18 million adults do not save by

any mechanism, whether formal or informal.

Various financial education mechanisms in the market, which are not disseminated or that the

population does not access them.

The National Financial Inclusion Policy: "The third challenge to advance in terms of financial inclusion

lies in the fact that knowledge of the formal financial system is insufficient for better use of

products and services. According to the ENIF 2018, less than 13% of the population took any course

of financial education on how to save, how to make a budget or on the responsible use of credit and

more than 54% do not keep a record or account of their expenses. "

Consolidation of the Popular Savings and Credit and Cooperative Sector, as an alternative to traditional

banking, in process.

The SACPyC has grown steadily in recent years. In 2018, the number of accounts

deposit grew by 13% and loans by 5% compared to the previous year, compared to Multiple Banking which grew by 2% and 3%, respectively. According to the Financial Inclusion Report 9, from the CNBV, there is

a high concentration of clients in a few Societies.

The SACPyC participates with 19% of the total branches in the country and with 83% of the branches in

rural zones (CNBV, 2018).

The main challenge of the SACPyC is to strengthen its capabilities and competencies to have an

efficient and robust operation to be one of the main engines of financial inclusion in the rural and

semi-urban zones of the country. In this sense, it is a strategic ally of Banco del Bienestar in the promotion of

financial inclusion.

Vulnerability of the migrant population.

The financial inclusion of nationals residing abroad represents a challenge for the Bank

of Well-being, since, due to their migratory status, they tend to live in social, political and economic conditions

unfavorable. They live in a country whose language they do not necessarily dominate, often are not

familiar with the legal system and, therefore, their access and use of the financial system is limited.

Lack of innovation and development of digital business schemes.

According to figures from the Financial Inclusion Report 9, from the CNBV (2019):

" Mexico has 238 FinTech companies, which positions the country as the largest FinTech ecosystem

in Latin America, ahead of Brazil, with 230, according to the Finnovista Radar. [ ... ] "

However, the growth of this type of company, with the entry into force of the Law to Regulate the

Financial Technology Institutions, presents an important challenge for this sector.

The population that is part of the target sector of Banco del Bienestar has access

limited to financing schemes.

Based on the document "What works and what does not work in financial inclusion?", issued by CONEVAL, it is

relevant to mention that, at the end of the 2015 exercise, 70.9% of the population in Mexico (between 18 and 70

years), reported not having bank credit or bank credit card, department store, self-service store

or with any other financial institution.

The penetration of credit in Mexico is 12% of the adult population, which is a percentage lower than that of

other Latin American economies such as Chile (31%), Brazil (26%). Colombia (21%) and Peru (19%)

(Fintex,

2017).

Absence of affordable financing mechanisms for the population that is part of the

service sector of Banco del Bienestar.

In relation to what was mentioned in the previous point, in rural areas this percentage reached 80.6%,

while in the urban population it was 65.7%. According to the document "What works and what does not work in

financial inclusion?", issued by CONEVAL, the reasons reported by the Mexican population for not

having a credit were the following: do not meet the requirements (32.9%), interest or commissions are

too high (14.2%), because they do not like to get into debt (39.5%), or they are not interested or need (19.3%).

Likewise, segments of the population that have not been served by the formal and/or

regulated financial system often resort to financing tools where interest rates are excessive.

Limited supply of productive financing schemes.

The 2018 National Financial Inclusion Survey identified that only 31% of the

Mexican population aged 18 to 70 has formal credit. In the case of micro, small and medium

enterprises, the percentage is even lower.

The ENAFIN 2018, states that, in the year 2017, among the factors that most affected the growth of

companies are: country's economic situation (26.7%), insecurity and criminality (23.3%), lack

of government support (21.2%), intense or unfair competition (18.7%), lack of financing (18.2%) , low

purchasing power of customers (17.2%) and cost of financing (16.7%) , among others.

Likewise, the ENAFIN 2018 identified that in the 2018 exercise only 21.7% of the companies

had financing, highlighting the following sources: commercial banking (75.4%), suppliers (30.4%) and

relatives or friends (11.7%).

Among the main limitations to access financing stand out: high interest (53.5%), many

requirements (23.9%) and many procedures (4.6%).

For the year 2018, the ENAFIN 2018 establishes that 21.5% of companies have considered applying for a

credit, this with the purpose of expanding the business (53.1%), investing in fixed capital or technology (51.0%) and

paying debts (35.2%).

In the ENAPROCE 2018, it is observed that, in the face of the offer of a bank credit, 73.6% of the

MSMEs would not accept it because: they do not trust banks (14.9%), it is expensive (57.9%), they do not need it

(20.4%) and others (6.8%). The MSMEs that had financing mainly used it for

purchase of inputs (81.3%), purchase of machinery

(27.5%), payment of other credits (25.6%), expansion

of production (11%) and payment of salaries (10.2%).

Limited banking coverage for the operation of social programs.

Within the PNIF it was identified that there are 577 municipalities that do not have at least one branch,

ATM, or correspondent. Likewise, the population that lives in rural localities must spend more

than 50 pesos to travel to a branch.

This problem directly impacts the beneficiary population of the Federal Government's social programs,

since due to their geographic location they have scarce or non-existent banking coverage, which implies

travel costs to access formal financial services.

The availability of banking infrastructure positively influences the dispersion of social programs,

as it allows the most vulnerable population to access resources with lower costs.

In turn, the NDP 2019-2024, identifies in addition to the insufficient banking infrastructure, the need to

eliminate the handling of cash, in the dispersion of resources of social programs, in order to

reduce

the possibility that corrupt or clientelistic practices are generated in their management.

For the above, Banco del Bienestar must increase and bring closer the availability of financial

services through different access means with priority on the beneficiary population of social

programs.

4.2 Characterization of the target population

In order to contribute to economic, social, individual and family development, as well as provide products and

financial services to the population excluded from the banking system and achieve that a greater number of Mexicans

use formal financial products and services, it is proposed that Banco del Bienestar, in addition to attending

the figures referred to in the LACP and the LRASCAP, orient its efforts to natural persons

and legal entities

that:

• Be among the excluded population (those who do not have access to financial services);

• Use informal mechanisms for savings, credit and other financial services; and/or;

• Economic segments and population that have a need for financial services, and that use them

under adverse market conditions, in terms of access, price and/or quality.

Likewise, as established by the Political Constitution of the United Mexican States in its article 25,

under criteria of social equity, productivity and sustainability; it will support and promote private sector companies

of the economy, subject to the modalities dictated by the public interest and to the use, in

general benefit, of productive resources; therefore, the construction of financial citizenship and the

inclusion in patrimonial democracy, must recognize this sector as an entity that contributes to the development

of the Nation, therefore the following societies are an integral part of it, which are governed by various

laws and recognized by the Secretariat of Economy with its various modalities, and which are listed below:

Cooperatives

Limited school cooperative (CEL)

Federations of limited liability cooperatives

(FC of RL)

Savings and loan cooperative society (SCAP)

Limited liability production services cooperative society

of variable capital (SC of PS

of RL of CV)

Production cooperative society (SCP)

Limited liability rural production cooperative society

(SCPR of RL)

Limited liability micro-industrial artisan society

of variable capital (S of RL MIART of CV)

Limited liability savings and loan cooperative society

(SC of AP of RL)

Limited liability savings and loan cooperative society

of variable capital

(SC of AP of RL of CV)

Limited liability goods and services consumption cooperative society

of variable capital

(SC of C of BYS of RL of CV)

Limited liability consumption cooperative society

(SC of C of RL)

Limited liability consumption cooperative society

of variable capital (SC of C of RL of CV)

Limited liability consumption cooperative society

(SC of C of RL)

Supplemented liability consumption cooperative society

(SC of C of RS)

Variable capital supplemented liability consumption cooperative society

(SC of C of RS of CV)

Variable capital cooperative society (SC of CV)

Limited liability goods and services production cooperative society

of variable capital

(SC of P of BYS of RL of CV)

Limited liability production cooperative society

(SC of P of RL)

Limited liability production cooperative society

of variable capital (SC of P

of RL of CV)

Supplemented liability production cooperative society

(SC of P of RS)

Variable capital supplemented liability production cooperative society

(SC

of P of RS of CV)

Unlimited liability cooperative society

(SC of RI)

Limited liability cooperative society

(SC of RL)

Societies

Limited liability society (S of RL)

Variable capital limited liability society

(S of RL of CV)

Limited liability society of public interest

(S of RL of IP)

Variable capital limited liability society of public interest

(S of RL of IP of CV)

Social solidarity society (S of SS)

Simple limited partnership (SENC)

Variable capital simple limited partnership

(SENC of CV)

Limited partnership by shares (SENC

PORA)

Variable capital limited partnership by shares

(SENC PORA of CV)

General partnership (SENNC)

Variable capital general partnership

(SENNC of CV)

Anonymous society (SA)

Variable capital anonymous society

(SA of CV)

Variable capital anonymous society

multiple object financial entity unregulated

(SA of CV SOFOM ENR)

Variable capital anonymous society

multiple object financial entity regulated

(SA of CV SOFOM ER)

Variable capital anonymous society

popular financial society (SA of CV SFP)

Anonymous society popular financial society

(SA SFP)

Anonymous society multiple object financial entity

unregulated (SA SOFOM ENR)

Anonymous society multiple object financial entity

regulated (SA SOFOM ER)

Bourse anonymous society (SAB)

Variable capital bourse anonymous society

(SAB of CV)

Variable capital savings and loan society

(SAP of CV)

Investment promoter anonymous society

(SAPI)

Variable capital investment promoter anonymous society

(SAPI of CV)

Variable capital investment promoter anonymous society

multiple object financial entity unregulated

(SAPI of CV

SOFOM ENR)

Variable capital investment promoter anonymous society

multiple object financial entity unregulated

(SAPI of CV

SOFOM ENR)

Investment promoter anonymous society

multiple object financial entity regulated

(SAPI SOFOM ER)

Limited liability cooperative society

of variable capital (SC of RL of CV)

Limited liability cooperative society of

public interest and variable capital

(SC of RL of IP of CV)

Limited liability micro-industrial cooperative society

(SC of RL MI)

Supplemented liability cooperative society

(SC of RS)

Limited liability services cooperative society

of variable capital (SC of S of RL of CV)

Limited liability goods and services production cooperative society

(SC PBS of RL)

Limited cooperative society (SCL)

Variable capital limited cooperative society

(SCL of CV)

Limited liability production and consumption cooperative society

of variable capital

(SCPC of RL of CV)

Supplemented cooperative society (SCS)

Limited liability and variable capital cooperative union

(U of C of RL and of CV)

Associations

Partnership association (A in P)

Agricultural association (AA)

Civil association (AC)

Livestock association (AG)

Local association of rural producers (ALPR)

Bourse investment promoter anonymous society (SAPIB)

Variable capital bourse investment promoter anonymous society

(SAPIB of CV)

Simplified share society (SAS)

Civil Society (SC)

Variable capital supplemented liability savings and loan cooperative society

(SC of AP of RS of CV)

Variable capital limited liability cooperative society

(SC of RL of CV)

Variable capital supplemented liability cooperative society

(SC of RS of

CV)

Particular civil society (SCP)

Universal civil society (SCU)

Community financial society (SFC)

Collective management society (SGC)

Public interest collective management society

(SGC of IP)

Unlimited liability rural production society

(SPR of RI)

Variable capital unlimited liability rural production society

(SPR of RI of CV)

Limited liability rural production society

(SPR of RL)

Variable capital limited liability rural production society

(SPR of RL of CV)

Collective interest rural association (AR of IC)

Unlimited liability collective interest rural association

(AR of IC of RI)

Variable capital unlimited liability collective interest rural association

(AR of IC of RI of CV)

Limited liability collective interest rural association

(AR of IC of RL)

Variable capital limited liability collective interest rural association

(AR of IC of RL of CV)

Micro-industrial-artisans

Limited liability micro-industrial society (S

of RL MI)

Limited liability micro-industrial

artisan society (S of RL MI ART)

Supplemented liability rural production society

(SPR of RS)

Variable capital supplemented liability rural production society

(SPR of RS of

CV)

Union of Communities (U de C)

Union of Ejidos (U de E)

Union of Limited Liability Ejidos

(U de E de RL)

Union of Production (U de P)

Agricultural and Industrial Units for Women

(UAIM)

Union of Unlimited Liability Rural Production Societies (USPR de RI)

Union of Limited Liability Rural Production Societies (USPR de RL)

Union of Supplemented Liability Rural Production Societies (USPR de RS)

In this context, according to figures from the 2018 National Survey of Financial Inclusion, of the 79.1 million people classified as adult population (18 to 70 years old), a total of 25.1 million people (32% of the total) reported not having any type of financial product.

From this universe (79.1 million adults), 37.3 million reported having a savings account; 24.6 million mentioned having access to credit accounts; 20.1 million had insurance and 31.3 million possessed different savings schemes for retirement.

It also emerges from said Survey that only 42% of adult women living in rural areas have at least one account, a percentage that in the case of men rises to 36%.

In this sense, the Attention Sector of the Banco del Bienestar will be composed of natural and legal persons who, according to the criteria reviewed and updated by the Board of Directors, have limited access to financial services due to their socioeconomic condition or geographic location, and to legal persons referred to in the Popular Savings and Credit Law and the Law to Regulate the Activities of Savings and Loan Cooperative Societies. This, in compliance with what is established in Article 2, Section IV of the Organic Law of the Banco del Bienestar.

4.3 Guiding Principles

NPD 2019 - 2024

As part of the national planning process, the NPD 2019-2024 defines 12 guiding principles through which it seeks to promote the construction of a post-neoliberal proposal and to turn it into a viable model of economic development, political ordering and coexistence among social sectors, with the commitment to promote sustainable development, identified as an indispensable factor for well-being, mainly in alignment with the eighth Sustainable Development Goal within the framework of the 2030 Agenda, which is detailed further below.

√

Honesty and Honesty

The most destructive and pernicious characteristic of Mexican neoliberals was the widespread corruption and converted into regular administrative practice. Corruption has been the main inhibitor of economic growth. That is why we are committed, first of all, to ending corruption in all public administration, not only monetary corruption but that which involves simulation and lies.

√

No to a rich government with a poor people

The monumental thefts of public resources were accompanied by waste, sumptuousness and frivolity at the expense of the treasury and the enriched rulers have been the insulting counterpart of the poverty of millions. The looting of the budget and the pharaonic luxuries of high officials consumed the resources that should have been used in the fulfillment of the State's obligations to the population, particularly to the most deprived, and to put an end to the waste with a policy of republican austerity.

√

Outside the law, nothing; above the law, no one

In the face of the systematic breaking of laws, both in their spirit and in their letter, we must exercise power with strict compliance with the legal order, the separation of powers, respect for the federal pact, in observance of social, collective and social rights, starting with human rights, and the end of political repression; nothing by force; everything, by reason; resolution of conflicts through dialogue; end of privileges before the law and cessation of fueros.

√

Economy for well-being

The objective of economic policy is not to produce harmonious figures and statistics but to generate well-being for the population. Macroindicators are a measurement instrument, not an end in themselves. We will resume the path of growth with austerity and without corruption, fiscal discipline, cessation of indebtedness, respect for the autonomous decisions of the Bank of Mexico, job creation, strengthening of the internal market, promotion of agriculture, research, science and education.

√

The market does not replace the State

For decades, the neoliberal elite insisted on reducing the State to an administrative apparatus in service of large corporations and a coercive instrument against the majorities. Their idea that public institutions should renounce their role as leaders and promoters of development, justice and well-being, and that it was enough for "the invisible hand of the market" to correct distortions, imbalances, injustices and aberrations, was a costly insensitivity. The State will regain its strength as guarantor of sovereignty, stability and the rule of law, as arbitrator of conflicts, as generator of coherent public policies and as articulator of national purposes.

√

For the good of all, first the poor

Just as Benito Juárez consummated the separation between Church and State, the Fourth Transformation has proposed to separate political power from economic power. The connivance and fusion between both led to a governmental exercise oriented to benefit private and corporate interests to the detriment of the population. But a society that disengages from its weakest and most vulnerable members breaks the principle of empathy which is an indispensable factor of cohesion, establishes the law of the strongest and ends in total debasement.

√

Leave no one behind, leave no one out

Exclusive economic growth, concentrating wealth in a few hands, oppressive of population sectors and minorities, predatory of the environment, is not progress but regression. We are and will be respectful of indigenous peoples, their customs and traditions and their right to self-determination and to preservation of their territories; we advocate for substantive equality between women and men, the dignity of older adults and the right of young people to have a place in the world; we reject all forms of discrimination based on physical characteristics, social position, schooling, religion, language, culture, place of origin, political and ideological preference, gender identity, orientation and sexual preference. We advocate for a development model respectful of inhabitants and habitat, equitable, oriented to remediate and not to aggravate inequalities, defender of cultural diversity and the natural environment, sensitive to the modalities and singularities of regional and local economies and aware of the needs of the future inhabitants of the country, whom we cannot leave with a territory in ruins.

√

There can be no peace without justice

Insecurity, crime and violence have an unacceptable cost in human lives and material goods, social cohesion and governance, inhibit economic growth and weaken the confidence of the population in their country, their state, their municipality and their neighborhood. The public security strategies applied by previous administrations have been catastrophic: far from resolving or attenuating the catastrophe they have aggravated it. We are already applying a new paradigm in matters of peace and security that sets as priorities to reduce the social base of criminality through the massive incorporation of young people into study and work to keep them away from antisocial behaviors; recovery of the principle of social reintegration; end of the "war on drugs" and adoption of a prevention and treatment strategy for addictions; promotion of regional pacification processes with clarification, justice, reparation, guarantee of non-repetition and national reconciliation, and measures against money laundering and police intelligence. The constitutional reform that allows us to have the National Guard as a peace and proximity police, with permanent presence throughout the territory, has already been promulgated. From the first day of my mandate we hold daily meetings with the security cabinet to have precise and punctual information and follow-up on criminal facts.

√

Respect for the rights of others is peace

Mexico has recovered the principles that made its foreign policy a world example: non- intervention, self-determination, relations with all peoples based on cooperation for development, peaceful resolution of conflicts through dialogue and rejection of violence and war, respect for human rights.

√

No more migration due to hunger or violence

The greatest wealth of nations is its population; however, the neoliberal model aggravated the emigration of Mexicans and today we have that a high percentage of our people reside outside the country, often in precarious conditions and subject to discrimination and abuses. We aspire to offer all citizens the adequate conditions so that they can live with dignity and security in the land where they were born. Our consulates in the United States will function as defenders of the migrant and we will achieve that no one else has to leave their place of origin to earn a living or seek refuge in other countries. Mexico has a long tradition as a land of asylum and refuge that has saved countless lives and enriched the country. To foreigners who arrive in our territory we will grant respect for their rights, hospitality and the possibility of building a new life here.

√

Democracy means the power of the people

We will equip ourselves with a participatory democracy to socialize political power and involve society in major national decisions. Such is the sense of mechanisms such as popular or citizen consultation, periodic revocation of mandate and community assemblies as effective instances of participation. We reaffirm the principle that the government commands by obeying and we want a society that commands by obeying itself.

√

Ethics, Freedom, Trust

The paradigm we are building is based on the conviction that generosity is stronger than egoism, empathy is more powerful than hate, collaboration is more efficient than competition, freedom is more constructive than prohibition and trust is more fruitful than distrust. We are certain that the ethical and civilizational principles of our people are the keys to the new social pact and to the development model for the Mexico that is being reborn after the long and dark night of neoliberalism.

In this context, to contribute to national development, the Banco del Bienestar will seek the implementation of actions oriented to the fulfillment of the following objectives set forth in the NPD 2019-2024 through two main Axes:

General Axis 2 of Social Policy, the strategy of banking the beneficiary population of the different social programs, will contribute to the dispersal of resources of the social programs that will be carried out by the Bank.

Currently, the Bank disperses resources from the Program for the Well-being of Older Adults Program, Pension for the Well-being of Persons with Disabilities Program, National Scholarship Program for Well-being Benito Juárez, Young People Writing the Future, Planting Life, and from the National Reconstruction Program.

The channels to achieve the banking of beneficiaries of social programs defined in the PNIF are: i) the digitization of financial services, ii) the construction of bank branches and iii) the use of Integrative Development Centers.

Through banking, benefits such as " (...) the opening of bank accounts for the first time, the reduction in the gender gap in the financial system and the reduction in the use of cash " are sought to be achieved.

General Axis 3 of Economy, which establishes the policy of promoting economic reactivation, the internal market and employment, with a focus on the creation of labor spaces through sectoral programs, regional projects and infrastructure works, but also facilitating access to credit for small and medium-sized enterprises, reducing and simplifying the requirements for the creation of new companies.

Likewise, the NPD 2019-2024 establishes the creation of the Banco del Bienestar, contemplating the increase in its points of attention:

Creation of the Banco del Bienestar

The vast majority of the population in poverty lacks access to the banking system. In many municipalities in the country there is not a single branch of financial institutions nor even an terminal. Taking as a base the structure of the National Savings Bank and Financial Services (Bansefi), the federal government is building the Banco del Bienestar, whose main purpose is to offer banking services to beneficiaries of social programs and eliminate the handling of cash in the dispersal of resources of such programs. In this way, the possibility that corrupt or clientelistic practices are generated in the handling of support will be eliminated.

The Banco del Bienestar will expand the number of branches to meet this objective.

PRONAFIDE 2020 - 2024

With the purpose of continuing with the actions for the development of national strategic planning, the PRONAFIDE 2020-2024 was published in the Official Journal of the Federation, which presents the objectives and priority strategies, as well as specific actions in the fiscal and financial sectors, that will ensure the availability of necessary resources to increase investment and promote the development of the country.

In this context, this Institutional Program is aligned with elements that make up the PRONAFIDE, in which it will participate for its achievement.

Priority Objective 6. Financing and Development Banking

Expand and strengthen the financing and planning of development banking and other vehicles of financing of the Federal Public Administration, as well as foster greater financial inclusion of target sectors and greater participation of the private sector, to contribute to sustained economic development of the country and social well-being.

Priority Strategy 6.1: Promote access to development banking financial services, through financing schemes and programs as well as other financial products, that allow greater inclusion of its target population that faces access limitations to the private formal financial system.

Specific Action 6.1.1. Promote greater financial inclusion of SMEs, rural population, vulnerable groups, and armed forces personnel through the design of new programs, products and financial services for social well-being and economic growth.

Specific Action 6.1.4. Develop mechanisms that incentivize entry schemes for new accredited persons, as well as graduation to the private financial system of persons accredited with short-term financing with ten or more years of seniority, to promote competitiveness and productivity of the sectors.

Specific Action 6.1.5. Promote growth in the use of bank accounts so that beneficiary persons can generate a banking history and access to schemes of financing.

Priority Strategy 6.2: Promote greater financing with the participation of the private sector in priority sectors to contribute to national economic development.

Specific Action 6.2.1. Promote greater financing through credit and guarantees to the sectors attended by development banking, to promote productivity and competitiveness in support of economic growth and sustainable development of the country.

Specific Action 6.2.2. Develop credit placement strategies in first and second tier to strengthen the presence of development banking in its target population.

Specific Action 6.2.3. Strengthen the offer of guarantee schemes and programs that incentivize greater participation of private financial intermediaries, banking and non-banking, in order to increase and improve financing conditions for priority sectors.

Priority Strategy 6.3: Promote and facilitate the use and contracting of financial services and of electronic transactions offered by development banking to increase access for the population and target sectors.

Specific Action 6.3.1. Foster mechanisms and actions for the dispersal of resources of government programs granted through bank accounts in underserved areas, in order to achieve greater financial inclusion and contribute to social well-being.

Specific Action 6.3.2: Promote mechanisms and actions for the development of financial infrastructure necessary by the Banco del Bienestar, which allow greater reach and penetration at the national level.

Specific Action 6.3.3. Promote the use of secure and efficient electronic payment systems oriented to the target population of development banking to promote greater use of electronic transactions and the exploitation of new technologies.

Specific Action 6.3.4. Foster the use of viable financial technology applications (Fintech) under a risk mitigation framework, to promote the use of new technologies.

Specific Action 6.3.5. Design financial products and services directed at women to foster their financial inclusion.

Priority Strategy 6.4: Take actions in matters of financial education and training, in order to contribute to the efficient and responsible use of resources and financial services.

Specific Action 6.4.1. Provide training, financial education and technical assistance to the beneficiary population of programs and financing schemes, as well as other financial services offered by development banking, emphasizing women, businesses directed by women, young people and other groups in vulnerable situations, in order to contribute to greater financial inclusion.

4.4 Sustainable Development Goals 2030

The Sustainable Development Goals (2015-2030) are an initiative promoted by the United Nations to continue the development agenda after the Millennium Development Goals. There are 17 goals and 169 targets, including spheres such as climate change, economic inequality, innovation, sustainable consumption and peace, and justice, of which the Banco del Bienestar participates in the following:

Goal 8. Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all.

Target - 8.10. Strengthen the capacity of national financial institutions to encourage and expand access to banking, financial and insurance services for all.

Sectoral Coordination

The activities carried out by the Fiscal Sector will be coordinated through the Development Banking Unit of the Ministry of Finance and Public Credit.

4.5 Entity Profile

New object of the Bank and contribution to the new development model

The new object of the Bank profiles the activities to be performed as a contribution to the fulfillment of the new development model:

Guiding Principles of the Plan National Development

Object of the Banco del Bienestar

Contribution to the new model of development

• Economy for well-being.

• Leave no one behind, no leave no one out.

• No to a rich government with poor people.

• Promote and facilitate: ü Savings. ü Access to financing under equitable conditions. ü Financial inclusion. ü Use and promotion of technological innovation in order to procure better conditions for the members of the Sector. ü Gender perspective and the investment among the members of the Sector.

• The offer of first and second tier instruments and financial services to the Sector.

• The granting of financial and technical support to the Sector.

• The dispersal of resources of social programs.

• Contribute to economic development at national and regional level.

• Promote the well-being of the beneficiaries of social programs.

• Promote the healthy development of the Sector attended by the Bank.

a) Creation of the Banco del Bienestar to promote the new development model

With the publication of the Reform to the Organic Law, published in the Official Journal of the Federation on July 19 of the 2019 exercise, BANSEFI was transformed into the Banco del Bienestar, Sociedad Nacional de Crédito, Development Banking Institution, in order to expand its object and ensure that it becomes a solid and efficient social banking institution that effectively contributes to building economic development with equity aspired by the population of the country. To achieve this, the Banco del Bienestar will have as its object to generate an offer of useful, affordable and quality financial products and services that effectively address the factors that promote the effective exercise of the right to access development, to economic, social and financial inclusion, and the well-being of users of financial services, especially those with lower incomes.

The policy of promoting well-being and economic development of the Government of Mexico must be reflected in substantive inclusion and equality and contribute decisively to the promotion of transparency, for which it is indispensable to guarantee access to support, pensions and constitutional scholarships, substituting the use of cash with electronic payment methods issued by formal financial institutions, where the Banco del Bienestar plays a fundamental role. In this context and in compliance with the republican austerity policy, the Banco del Bienestar is based on a business model and strategy that will allow it to be sustainable to be able to fulfill its social objectives.

For the attention of tasks of promotion, operation, monitoring, administration and results of the network of branches, the Bank considers the distribution of these through 20 Regional Coordinations.

b) SWOT Analysis

As part of the institutional diagnosis, the following strengths, weaknesses, opportunities and threats were identified.

c) Institutional values and principles

The values and principles defined by the Banco del Bienestar internally are detailed below:

Public Interest. The public servant will act seeking maximum attention to the needs and demands of society above particular interests and benefits, alien to collective satisfaction.

Respect. The public servant will conduct themselves with austerity, without ostentation and will grant a dignified and cordial treatment to people in general, as well as to their coworkers, superiors and subordinates,

considering their rights, in such a way that courteous dialogue is promoted.

Respect for Human Rights. The public servant must respect, guarantee, promote, and protect human rights, in accordance with the Principles of Universality (human rights correspond to every person simply by virtue of being so); Interdependence (human rights are intimately linked to one another); Indivisibility (human rights form a totality such that they are complementary and inseparable); and Progressivity (human rights are in constant evolution and under no circumstances is a regression in their protection justified).

Equality and Non-Discrimination. The public servant will provide their entrusted services to all members of society who have the right to receive them without distinction, exclusion, restriction, or preference based on their gender, age, race, disabilities, creed, religion, political preference, social, economic, health, or legal condition, physical appearance, genetic characteristics, migratory or family situation, pregnancy, sexual preferences, civil status, language, criminal record, or any other reason.

Gender Equity. The public servant within the scope of their competence and authority must guarantee that men and women access public goods and services; institutional programs and benefits; and government jobs, positions, and commissions under the same conditions, possibilities, and opportunities.

Cultural and Ecological Environment. In carrying out their activities, the public servant must avoid affecting our cultural heritage and the planet's ecosystem, assuming a firm will of respect, defense, and preservation of culture and the environment, which is reflected in their decisions and acts. Our culture and the environmental surroundings are our main legacy for future generations, so Public Servants also have the responsibility to promote their protection and conservation in society.

Integrity. The public servant will always act in a manner consistent with the principles that must be observed in the performance of their employment, position, commission, or function, convinced of the commitment to adjust their conduct so that an ethics responding to the public interest prevails in their performance and generates full certainty of their conduct before all persons with whom they are linked or who observe their actions.

Cooperation. Public servants will collaborate with each other and promote teamwork to achieve the common objectives of the Institution, thereby generating a full vocation for public service for the benefit of the community and citizen confidence in the Institution.

Leadership. The public servant must be not only a guide, example, and promoter of the Code of Ethics, but also must foster and apply the principles in society in the performance of their functions, as well as those additional values that are intrinsic to the public function due to their importance.

Transparency. The public servant in the exercise of their functions will protect personal data under their custody; will allow and guarantee access to government information, with no limit other than that imposed by public interest and the privacy rights of individuals established by law.

Accountability. For the public servant, accountability means fully assuming before society and authorities the responsibility derived from the exercise of their employment, position, or commission; therefore, they inform, explain, and justify their actions and decisions, and are subject to a system of sanctions, as well as to the evaluation and public scrutiny of their functions by the citizenry.

Ethical Principles of Public Servants: Common Good, Legality, Honesty, Loyalty, Impartiality, Efficiency, Justice, and Generosity.

d)

Mission and Vision

In order to drive an adequate planning process and the achievement of specific results, it is necessary to have a clear approach to where one wants to go, an objective reflected in the new definition of the Institution's Mission. Likewise, the aspirational objective of the Bank in the medium and long term has been stated in the new concept of Institutional Vision.

Mission

To create ethical and social banking to make effective the right to access development, economic, social, and financial inclusion, as well as to guarantee access to constitutional support, pensions, and scholarships, primarily for the excluded population.

Vision

To be the social banking institution of the Mexican State that promotes universal access to financial services for inclusion, development, and the full exercise of human rights of the entire population, with the greatest territorial closeness in the regions of the country.

Main Expected Changes

Provide users with wide geographic coverage, particularly in hard-to-reach areas, through the expansion of the branch network in rural areas of the country to generate greater financial inclusion of the people, with physical and cultural closeness, to guarantee the exercise and respect of human rights, dignity, democratic and financial equality, as well as service and attention points, automated teller machines, correspondents, and digital payment media.

Taking into account the characteristics of the Bank's target market, it seeks to offer new programs, products, and useful, affordable, and quality financial services, adequate to the needs of different segments and at accessible costs, in order to reduce financial inclusion gaps and promote access and use of formal financial products and services, social well-being, and economic growth.

Strengthen access to financial education and training to boost productivity, savings, and wealth generation for families in their own communities.

The value proposition for the administrative dependencies of government social programs considers ensuring the effective exercise of the constitutional right to economic support, pensions, scholarships, and other social programs through the expansion of mechanisms for the dispersion of money through the promotion and growth in the use of bank accounts, also decreasing corruption, the costs of cash distribution, and improving the security of people in the handling of their resources.

New Business Model

Based on the diagnosis and analysis of strengths and weaknesses, as well as the opportunities and threats identified for the operation of Banco del Bienestar, the new Business Model was defined, which is composed of various components, considering sustainability (equity and equality):

√

Strengthening and expansion of the Banco del Bienestar branch network.

√

Technological update of operational systems and applications.

√

Banco del Bienestar must be the bank that disperses the resources of the social programs of the Government of Mexico, which will allow having the necessary income to achieve sustainability.

√

Strengthen the financial products and services in which competitive advantages exist and that promote the sustainability of the Bank.

√

It must develop a portfolio of competitive financial products and services that allows it to obtain sufficient income to maintain its capital in real terms.

The above will be achieved with the development of mechanisms for institutional strengthening, which constitute the bases for the Bank's growth model, supported by:

i.

Optimize the exercise of fiscal resources and containment of own resource spending to generate savings.

ii.

Make the operation of technological systems more efficient for the development of substantive activities.

iii.

Identify and address human resource needs for the fulfillment of the Bank's priority objectives.

iv.

Strengthen the culture of process management, as well as robustify internal controls and audits to efficientize operations.

v.

Optimize risk management in substantive and administrative processes.

vi.

Promote the monitoring and evaluation of the components and commitments that make up the institutional strategy, with the objective of contributing to its compliance.

vii.

Position Banco del Bienestar as an Institution committed to transparency and accountability.

Actors that support the fulfillment of objectives

Federal Government Institutions, State and Municipal Governments, Alliance with the SACPyC, as well as the coordination of the Development Banking Unit as part of the Fiscal Sector.

In turn, the actors that act as supervisors of the Bank's operation are the CNBV, BANXICO, the Secretariat of Public Function, and the Superior Audit Office of the Federation.

Current and Expected Geographic Coverage

Since its creation, the Bank has as its main objective the promotion of the savings habit and financial inclusion, for which it conceived from the beginning of its operation the establishment of branches for attention to the general public with priority in sites with no presence of banking where there is demand for financial products and services under competitive and favorable conditions for the most vulnerable populations of the country.

Thus, at the close of the 2019 exercise, the Bank has a banking infrastructure for the offer and operation of financial products and services and the dispersion of resources from social programs, according to the following:

427

6

11

106

5,762

1,692

Branches

BIDES

Modules

Automated Teller Machines

Correspondents

POS Terminals

Branches

With respect to the traditional offer and operation of financial products and services, it is important to note that the Bank has a network of 433 branches (considering 6 branches exclusive for the operation of BIDES, in addition to the 427) in the 32 federal entities, distributed as follows:

In these branches, the following products and services are offered:

• Deposit products on sight (Debicuenta)

• Savings products (Cuentahorro and Tandahorro)

• Investment (Promissory Note with Liquidable Yield at Maturity)

• Money transfers (national and international remittances)

• Deposit Tickets (BIDES)

• Receipt of Payments on Account of Third Parties (CONSAR, TELMEX, among others)

• Distribution of Microinsurance

• Purchase-Sale of Foreign Currency

• Commercial Commission Contract and Deposit of Titles in Custody and Administration (CODES)

• Dispersion of resources

• CETESDIRECTO Service

• Second Floor Credit Program for Financial Intermediaries, Trusts, and Public Entities

• Prior Savings Program for Housing

• Educational Programs for Individuals

• Educational Programs for Sector Societies

It is important to note that 6 branches of this Network specialize in the attention and operation of Deposit Tickets (BIDES) and are strategically located in Court offices (5 in Mexico City and 1 in Jalisco).

Attention Modules

The Bank has 11 attention modules located in INM offices in the northern border zone of the country, with an approach to attention focused on repatriates.

In this way, in alignment with the Repatriation Program, the Bank contributes what corresponds to the banking offer demanded by countrymen with respect to account opening, deposits, withdrawals, purchase and sale of dollars (according to Anti-Money Laundering and Countering the Financing of Terrorism criteria), and remittances (account credit).

Automated Teller Machines

With the purpose of incentivizing and facilitating the use of the debit card, the bank has 106 dispensing automated teller machines located mainly in the branch network.

Correspondents

The networks of banking correspondents with which the Bank has agreements have been strengthened, such that through Telecom and Yastás, access to basic operations (withdrawal, deposit, and balance inquiry) is offered in 5,762 points in the country.

Point of Sale Terminals

With respect to the dispersion of resources from social programs, and specifically regarding the closed channel delivery scheme, the Bank has 1,692 POS terminals for the attention of beneficiaries, highlighting that these devices are equipped with technology that allows carrying out enrollment processes, biometric media for beneficiary identification, and functionality that facilitates the operation and reconciliation of transactions.

Considering the different mechanisms for access to financial products and services, as well as banking operations described above, the Bank has nearly 8 thousand points/means for the attention of clients, users, and beneficiaries of social programs, whose concentrated coverage reaches 2,282 municipalities in the country, 93% with respect to the total number of municipalities in the country.

Other Alliances

The Bank seeks strategic alliances that favor the extension of access means for the use of the debit card, so agreements were celebrated with the OXXO store network (19,306 points) and the Qiubo network (32,451 points) in order to provide the cash back withdrawal service to the Bank's cardholders, being this its primary operation considering the volume of attention of social program beneficiaries for the delivery of resources.

Thus, the Bank seeks to have national coverage considering in principle its sector of attention, that is, the target population and its geographic location, giving priority in the generation of strategic alliances that promote access and use of electronic means, and if applicable, generate additional benefits in its operation.

Expansion of Banco del Bienestar

Based on the NDP, Banco del Bienestar foresees the establishment of new branches to:

i)

Bring financial services closer to the unbanked population.

ii)

Preferentially attend geographic zones that traditionally do not have the presence of financial intermediaries.

iii)

Offer products and services appropriate to the characteristics of the most vulnerable population and with priority to the population of beneficiaries of social programs.

These new branches will be established around the country, preferably in geographic zones that are not attended by financial intermediaries and/or where there is deficient coverage and attention.

Likewise, they will have as priority strengthening the presence and attention of the Bank where there is a concentration of beneficiaries of social programs.

Projects or programs derived

Strategic projects are the initiatives that will ensure the achievement of the mission, through the fulfillment of strategic objectives. These allow closing the gap between what is proposed to achieve and the current situation; oriented to supply, attend, and/or satisfy the demands posed by the target population.

Once areas of opportunity were identified in the diagnoses prepared by the areas that make up the Bank, the strategic projects were determined, which constitute the necessary foundation for the effective fulfillment of priority objectives.

Project/Initiative

1

Strengthening and expansion of the branch and channel network.

2

Increase the banking of the target sector.

3

Optimization of the portfolio of financial products and services.

4

Attention to organizational structure and human talent requirements.

5

Impulse to requirements for the financial model.

6

Strengthening of the internal control system.

7

Impulse for better risk management.

8

Robustification of information security.

9

Development of strategic technological projects.

5.- Priority Objectives

Banco del Bienestar is an institution of special relevance to achieve greater financial inclusion and raise levels of savings and formal financial services in the country, contributing to the reduction of poverty.

Social policy is universal and multisectorial, in addition to being the backbone of the actions of the Government of Mexico to strengthen the Republic; framed in actions, from the strengthening of the minimum wage, benefits and support for vulnerable groups such as the elderly, youth, and people with disabilities.

In such a way that it contributes to the fulfillment of the objectives set through the national planning process, contained in the NDP and PRONAFIDE, and attends what is defined in the 2030 Agenda of the United Nations. In addition, these objectives also maintain alignment with the republican austerity policy established in the NDP, pillar of the new administration, as well as with the perspective of maintaining the financial solidity of the Bank and the profitability of its capital in accordance with its social and development vision.

Through its objectives, Banco del Bienestar plans to address the identified problems, related to the limited access and use of formal financial services, mainly among the population that lives in areas of high marginalization and has characteristics that place them in a situation of vulnerability; supported, among others, in training schemes regarding financial topics.

Priority Objectives of the Institutional Program 2020-2024 of Banco del Bienestar, S.N.C., I.B.D.

1.- Foster greater financial inclusion through access and use of useful, affordable, and quality financial products and services, the strengthening in access to financial education and training, as well as the impulse of schemes that trigger the strengthening of the Bank's Sector of attention and local financial ecosystems.

2.- Expand productive promotion schemes, facilitating access to financial services in strategic sectors, through the development of first and second floor placement strategies.

3.- Ensure the effective exercise of the constitutional right to economic support, pensions, scholarships, and other social programs through the expansion of mechanisms for the dispersion of money, promoting its financial sustainability and the reconstruction of the social fabric.

5.1.- Relevance of Priority Objective 1: Foster greater financial inclusion through access and use of useful, affordable, and quality financial products and services, the strengthening in access to financial education and training, as well as the impulse of schemes that trigger the strengthening of the Bank's Sector of attention and local financial ecosystems.

The characteristics of people living in marginalized areas of the country are different from those of the population served by commercial banking. Living in rural areas means having limited access to infrastructure not only financial, but also educational and technological. The above has resulted in low levels of use, knowledge, and trust in formal financial products and services. According to this reality, Banco del Bienestar has positioned the promotion of comprehensive financial inclusion as its main objective.

Banco del Bienestar will increase its presence in the most remote localities to promote access, offer existing and potential customers personal and dignified treatment, offer simple, reliable, and competitive financial products and services, as well as impart financial education programs that include financial behaviors and lead to better financial health.

The Bank will strengthen and increase its presence through new branches at strategic points, an expansion of its correspondent network, and strengthening of the Popular Savings and Credit and Cooperative Sector societies. It will be possible to promote the use of financial products and services if people have access to attention points where trained personnel teach them about the functioning, characteristics, conditions, and requirements of said products, as well as the positive impacts that their adequate use can generate in the daily lives of people.

Additionally and in parallel, the Bank works so that its financial products and services are adequate to the characteristics, conditions, and needs of specific segments of its target population. This means that financial products and services must be simple and reliable, taking into account in particular the needs of segments defined mainly by the following variables: gender, age, economic activity, ethnicity, and location. With respect to its offer, the Bank implements a process of continuous analysis, design, and evaluation to periodically identify to what extent the offered financial products and services attend to the needs of its target population, so that, if applicable, the necessary adjustments are made for their optimization.

In this way, the Bank positions its financial education programs as a key tool to boost financial inclusion. Taking advantage of greater coverage for a more adequate offer of financial products and services, educational programs informed by behavioral economics are granted. These programs ultimately aim to improve the financial health of customers through the formation of positive financial behaviors. That is, the programs seek to increase knowledge levels and foster financial attitudes and skills that lead to decision-making in a more conscious, systematic, effective, and efficient manner. As with financial products and services, educational programs will be directed to specific socioeconomic groups, in order to maximize their impact on the daily financial life of the Bank's target population.

To address this problem, this Priority Objective has six priority strategies and 9 specific actions.

5.2.- Relevance of Priority Objective 2: Expand productive promotion schemes, facilitating access to financial services in strategic sectors, through the development of first and second floor placement strategies.

Financing is an important trigger for the economy of the various regions of the country, especially in those where people lack formal employment and are in the need to generate productive projects to be self-sufficient under the figure of micro-entrepreneurs.

The ENIF 2018 shows that 68% of working-age adults have access to at least one formal financial product; however, cash continues to dominate the economy and most of the Mexican population asks friends and family for loans when expenses exceed income.

In turn, the SME market continues to demand financing under favorable conditions for the development and evolution of their businesses.

In another context, and derived from changes in the country's public policy, needs are identified.

financing under competitive conditions in the target sector.

For the above reason, it is necessary to reactivate first-tier credit activity through productive credits for micro and small businesses, payroll credits for public servants through institutional agreements, and generally direct credit to members of the Sector.

On the other hand, and in parallel with the incorporation of first-tier credit supply, it is indispensable to strengthen the Bank's second-tier credit program with stable and positioned sector societies throughout the national territory, as well as with experience in credit placement, extending its scope with the objective of attending to sectoral economic activities in collaboration with governmental and/or parastatal allies.

In addition to the expansion of banking infrastructure, the Bank will complement its offer of financial products and services through access to financing in two ways, on the one hand, in underserved zones for market opening, and on the other in zones with infrastructure generating responsible competition among participants in the microfinance sector for the benefit of the population.

To address this problem, this Priority Objective has three priority strategies and four specific actions.

5.3.- Relevance of Priority Objective 3: Ensure the effective exercise of the constitutional right to economic support, pensions, scholarships, and other social programs through the expansion of mechanisms for money dispersion, promoting its financial sustainability and the reconstruction of the social fabric.

The National Development Plan (PND) sets as the main problem of the banking system its insufficient infrastructure to serve the population, mainly that which is in a situation of poverty. Additionally, the Plan states that many municipalities in the country (around 62%) do not have a bank branch or even an ATM.

In this order of ideas, beneficiaries of social programs are physically located today in populations with such characteristics, distant places with insufficient road communication means, generating high travel costs and extensive times in the receipt of their resources.

The attention to this problem gives rise to the creation of the Banco del Bienestar whose main purpose is the comprehensive offer of banking products to beneficiaries of social programs, as well as their financial inclusion and education considering for this purpose secure delivery mechanisms that eliminate the use of cash; on this last point, from January to June 2020, 57.1% of the support to beneficiaries of social programs was delivered electronically.

For this, the Bank considers the strengthening of its technologies with state-of-the-art equipment that will allow authenticating with a secure system the beneficiaries of social programs, providing guarantee and certainty that the support is delivered to their legitimate beneficiaries without intermediation or possibility of diversion, thus contributing specific actions to the Government's efforts in the fight against corruption.

Finally, anticipating the growth of the rolls of beneficiaries of social programs and the opening to segments of the underserved population, it is planned to strengthen and grow its banking infrastructure through the establishment of around 2,700 bank branches and the operation of a wide network of state-of-the-art ATMs for the attention of external clients and users. With these measures, attributes will be available that will allow the use of biometrics as an identification method, activation of cards with PIN recording, and in the case of some devices, providing the possibility of deposit and service payment operations in cash, collection and payment of services by credit or debit card, as well as reading of barcodes and QR Code for payment or acquisition of services.

This will allow that once the banking infrastructure is installed, access can be generated through development banking in places close to the populations that concentrate the largest volume of beneficiaries of social programs for their financial inclusion, and at the same time to the general population for the offer of accessible and competitive financial products and services, privileging for its use secure mechanisms that guarantee efficiency in the dispersion and handling of resources, and that provide direct attention without clientelism and with adequate service levels.

In this way, the banking and financial inclusion of people in the different zones of the country, will generate confidence in the various mechanisms available for the handling of resources, incentivizing in turn the operation through attention points of correspondents and strategic allies that the Bank currently has established and those that by their nature and location are strategic to formalize as part of its extension of its coverage for the attention of all municipalities in the country.

According to the findings derived from the ENIF 2018, formal services tend to be selected for the functional benefits they provide and at a reasonable cost, being relevant the creation of relationships that generate a sense of trust and belonging when using them. Consequently and implicitly, to the strengthening and expansion of the banking infrastructure proposed in the previous lines, corresponds the creation and strengthening of support and attention staff structures of the Bank, as well as the necessary training of these for the attention of the population and the achievement of links created through adequate service levels in the offer and operation of financial products and services.

In turn, the ENIF 2018 mentions that the unexplored market represents an opportunity for formal financial service providers to develop more specialized and relevant products that allow people to cover their financial needs, which aligns with the Bank's strategy to prioritize attention to municipalities and localities without banking infrastructure that in turn concentrate high volumes of beneficiaries of social programs.

To address this problem, this Priority Objective has three priority strategies and six specific actions.

5.4.- Institutional Alignment with PRONAFIDE

The priority objectives of the Banco del Bienestar are aligned with the sixth priority objective of the National Program for Development Financing 2020-2024:

Priority Objectives of the Institutional Program 2020 2024 of the Banco del Bienestar, S.N.C., I.B.D.

Priority Objectives of the PRONAFIDE 2020 - 2024

1.- Foster greater financial inclusion through access and use of useful, affordable, and quality financial products and services, the strengthening in access to education and financial training, as well as the promotion of schemes that trigger the strengthening of the Bank's target Sector and local financial ecosystems.

Priority Objective 6.- Financing and Development Banking.

Expand and strengthen the financing and planning of development banking and other financing vehicles of the Federal Public Administration, as well as foster greater financial inclusion of target sectors and greater participation of the private sector, to contribute to the sustained economic development of the country and to social well-being.

2.- Expand productive promotion schemes, facilitating access to financial services in strategic sectors, through the development of first and second tier placement strategies.

3.- Ensure the effective exercise of the constitutional right to economic support, pensions, scholarships, and other social programs through the expansion of mechanisms for money dispersion, promoting its financial sustainability and the reconstruction of the social fabric.

6.- Priority Strategies and Specific Actions

Below, the strategies and specific actions defined to achieve the priority objectives are described. The Institutional Program has three objectives, 10 priority strategies, and 16 specific actions that reflect the activities that the Banco del Bienestar will promote for the fulfillment of its mandate.

Priority Objective 1.- Foster greater financial inclusion through access and use of useful, affordable, and quality financial products and services, the strengthening in access to education and financial training, as well as the promotion of schemes that trigger the strengthening of the Bank's target Sector and local financial ecosystems.

Priority Strategy 1.1.- Consolidate the offer of products and services adapted to different segments of the target population (savings, investment, payments, credit, and insurance), supported by innovative digital schemes for the increase of financial inclusion.

Specific Action

1.1.1.- Adapt the product offer to the population segment of the Banco del Bienestar, based on market studies and research of the needs and habits of clients and users and measure their impact.

Priority Strategy 1.2.- Strengthen access to education and financial training, with schemes directed mainly to population segments in a situation of vulnerability to improve their capabilities in managing their finances.

Specific Action

1.2.1.- Provide education and financial training for clients and beneficiaries of social programs, Bank staff, unbanked persons, indigenous persons, micro-businesses, teachers and students, members of the Popular Savings and Credit Sector, migrants, and the general open population, through in-person and distance courses.

Priority Strategy 1.3.- Foster the use of cards, electronic payment means, products, and financial services through the creation or expansion of financial ecosystems in local communities for the increase of financial inclusion.

Specific Action

1.3.1.- Achieve alliances with state and local governments, national and international organizations, civil society organizations, and the private initiative to promote the development of financial ecosystems.

Priority Strategy 1.4.- Promote technical assistance and training schemes, focused on technological networks, innovation, development, expansion for the strengthening of the Popular Savings and Credit and Cooperative Sector.

Specific Actions

1.4.1.- Support the societies that are part of the Popular Savings and Credit and Cooperative Sector with various courses, workshops, and financial education training activities in person or online. Among these, topics such as Corporate Governance, Risks, Internal Control, Anti-Money Laundering Prevention, creation of Manuals, Policies, and Procedures can be included.

1.4.2.- Promote the growth and consolidation of the societies that are part of the Popular Savings and Credit and Cooperative Sector, seeking strategic commercial alliances.

Priority Strategy 1.5.- Foster the use of financial services by migrants to increase transactionality and financial penetration.

Specific Actions

1.5.1.- Foster conditions for migrants and their families in Mexico to use financial services through alliances and collaboration agreements with government departments, foundations, associations, and institutions abroad that serve the target population.

1.5.2.- Promote the training of consular staff and key actors in migrant communities on financial education for migrants and promote, through collaboration agreements, the recognition of the Banco del Bienestar in communities of Mexicans abroad in order to increase remittance operations, account opening, use, and benefits thereof.

1.5.3.- Promote the international remittance service through account credit and transactionality thereof.

Priority Strategy 1.6.- Increase coverage of attention through the strengthening of the Bank's infrastructure to foster access and use of the offer of financial products and services in geographic zones or regions that require priority attention.

Specific Action

1.6.1.- Expand the network of branches in rural areas of the country or geographic regions that require priority attention to provide financial products and services to the most vulnerable population and beneficiaries of social programs.

Priority Objective 2.- Expand productive promotion schemes, facilitating access to financial services in strategic sectors, through the development of first and second tier placement strategies.

Priority Strategy 2.1.- Develop and implement first and second tier credit programs, in accordance with the criteria authorized by the Board of Directors, directed mainly to the population segments that make up the target Sector of the Banco del Bienestar, for the benefit of the target population.

Specific Action

2.1.1.- Develop new credit products, such as payroll and consumption, as well as credits for productive activities, micro and small businesses (microcredits and first-tier credits), and members of the social sector.

Priority Strategy 2.2.- Strengthen promotion and internal processes to boost first and second tier credit, in accordance with the objectives of increasing access to financial products and bank sustainability.

Specific Actions

2.2.1.- Consolidate the credit promotion strategy among the sector served by the Banco del Bienestar in accordance with sustainability and accessibility objectives for financial services.

2.2.2.- Foster ethical behavior among accredited institutions for the benefit of the most unprotected population.

Priority Strategy 2.3.- Monitor compliance with the conditions for granting the different credit schemes, decreasing and monitoring the risk of default by the accredited entities.

Specific Actions

2.3.1.- Increase the follow-up and evaluation of the credit portfolio, through the implementation of containment and risk reduction schemes for the Bank.

Priority Objective 3.- Ensure the effective exercise of the constitutional right to economic support, pensions, scholarships, and other social programs through the expansion of mechanisms for money dispersion, promoting its financial sustainability and the reconstruction of the social fabric.

Priority Strategy 3.1.- Develop and use innovative low-cost technologies for the distribution of support.

Specific Actions

3.1.1.- Implement a scheme for the direct distribution of support to beneficiaries of social programs through their banking, primarily through the use of debit cards.

3.1.2.- Use biometric elements for the identification of beneficiaries through the use of Point of Sale Terminals enabled in branches and in the field within the national territory, as well as the development of technological applications.

Priority Strategy 3.2.- Increase the number of beneficiaries attended and/or banked to contribute to the society's well-being policy.

Specific Actions

3.2.1.- Increase the coverage of support distribution through electronic and efficient channels, throughout the national territory.

3.2.2.- Link more financial services to the distribution of support through the offer and operation in branches and access points throughout the national territory.

Priority Strategy 3.3.- Increase the Bank's coverage through the branch network.

Specific Actions

3.3.1.- Expand the branch network so that the Bank's target population is financially included throughout the national territory, with priority for municipalities and localities without banking infrastructure.

3.3.2.- Strengthen the branch network in the country to efficient its operation and service through the increase of infrastructure security mechanisms, as well as operating systems and sufficient personnel for the attention of the population.

7.- Goals for Well-being and Parameters

In consistency with the defined priority objectives, various indicators and goals, as well as parameters, have been established to complement the information for analysis. With this, trends and progress will be monitored to drive the Bank to fulfill its mandate.

Regarding this, these indicators have been defined sectorally by the Development Banking Unit, in order to maintain congruence with what is established in the PRONAFIDE.

It is in this sense that, derived from what is established through Official Letter No. 368.-150/2019 of the Development Banking Unit, through which the goals with which the Banco del Bienestar would participate were notified, it is considered relevant to list a series of factors that must be attended to achieve compliance with what is established by said Unit:

1. Have a sufficient banking technological platform, which supports the growth in the Bank's operation, this in light of the expansion process, derived from the increase in the branch network and the new portfolio of products and services.

2. Have an adequate and sufficient portfolio of products and services, thanks to which, clients who visit a branch or attention point have various options to be banked according to their needs.

3. The consolidation of the expansion of the branch network, with which there will be sufficient access points to face the committed goals.

4. Have sufficient capital contributions to support the fulfillment of the goals, since the placement levels required to reach the goals exceed the Bank's current capital.

Finally, it is necessary to highlight that, for the fulfillment of the goals, priority and emphasis will be given to the attention of actors that are part of the Social Sector of the Economy, ratifying the commitment established in the Institutional Mission, to create an ethical and social Bank, driving a true social transformation through economic activity.

Priority Objective

Goals for Well-being

Parameters

1

Growth in Financial Inclusion of the Sector

Financial Inclusion of the Sector by stratum

Financial Inclusion by Gender

Increase in new branches

2

Growth in the Balance of Direct and Induced Credit to the Private Sector

Growth in the Balance of Direct and Induced Credit to the Private Sector by stratum

Financing of new accredited entities

3

Financial Inclusion by bank accounts

Number of new active cards for banking

Linkage of additional products and services of banked clients

Priority Objective

Monitoring Indicators

1

Growth in Financial Inclusion of the Public Sector

1

Inclusion of new accredited entities

1

Inclusion of new accredited entities by stratum

1

Financial Education provided

1

Financial Education provided by stratum

1

Financial Education provided by Gender

1

Connectivity points

1

Increase in correspondents

1

Service provision

1

Digital services

2

Growth in the Balance of Direct and Induced Credit to the Public Sector

2

Financing of new accredited entities by stratum

2

Financing by Gender

3

Balance of bank accounts by Gender

3

Growth in electronic transactions

3

Amount in electronic transactions

3

Electronic transactions by Gender

3

Amount of electronic transactions by Gender

3

Percentage of social program beneficiaries who receive transfers through accounts with open channel

3

Percentage of social program beneficiaries who receive transfers through accounts with open channel by Gender

3

Growth of the balance by bank accounts

3

Financial inclusion of bank accounts by Gender

Goal for Well-being of Priority Objective 1

GOAL ELEMENTS FOR WELL-BEING OR PARAMETER

Name

Growth in Financial Inclusion of the Sector

Priority Objective

Foster greater financial inclusion through access and use of useful, affordable, and quality financial products and services, the strengthening in access to education and financial training, as well as the promotion of schemes that trigger the strengthening of the Bank's target Sector and local financial ecosystems.

Definition or description

Measures the growth in financial inclusion of the total number of natural and legal persons through direct and induced financing to the private sector

Level of disaggregation

National

Periodicity or frequency of measurement

Annual

Type

Strategic

Accumulated or periodic

Accumulated

Unit of measure

Percentage

Data collection period

January to December

Dimension

Effectiveness

Information availability

February

Expected trend

Ascending

Unit responsible for reporting progress

Deputy General Directorate of Corporate Strategy

Method of calculation

Observations

APPLICATION OF THE CALCULATION METHOD TO OBTAIN THE BASELINE

The baseline must correspond to a definitive value for the 2018 cycle or prior, it cannot be a preliminary or estimated value.

Name

variable 1

Total number of natural and legal persons supported in year 2018

Variable 1 Value

261,292

Information source for variable

1

System or report

Name

variable 2

Total number of natural and legal persons supported in year 2018

Variable 2 Value

261,292

Information source for variable

2

System or report

Substitution in calculation method

((261,292 / 261,292) 1) * 100 = 0%

BASELINE VALUE AND GOALS

Baseline

Note on the baseline

Value

0%

Year

2018

Goal 2024

Note on the 2024 goal

971.6%

It is integrated by 2,800,065 in 2024 and 261,292 in 2018.

The fulfillment of the established goals is conditioned to the following premises:

1. Have a sufficient banking technological platform, which supports the growth in the Bank's operation.

2. Have an adequate and sufficient portfolio of products and services.

3. The consolidation of the expansion of the branch network.

4. Have sufficient capital contributions to support the fulfillment of the goals.

HISTORICAL SERIES OF THE WELL-BEING GOAL

Values must be recorded in accordance with the measurement frequency of the Well-being Goal or Parameter.

You can register NA (Not applicable) and ND (Not available) when appropriate.

2012

2013

2014

2015

2016

2017

2018

ND

ND

ND

ND

ND

ND

0%

GOALS

Only applies to Well-being Goals.

You can register NA when a goal does not apply for that year, according to the measurement frequency.

2020

2021

2022

2023

2024

-100.0%

-63.0%

-3.0%

137.6%

971.6%

Parameter 1 of Priority Objective 1

WELL-BEING TARGET OR PARAMETER ELEMENTS

Name Financial Inclusion by Sector Segment

Priority Objective Promote greater financial inclusion through access to and use of useful, affordable, and quality financial products and services, strengthening access to financial education and training, as well as promoting schemes that trigger the strengthening of the Bank's service sector and local financial ecosystems.

Definition or description Measures growth in financial inclusion by segment of the number of individuals and legal entities through direct and induced financing to the private sector.

Level of disaggregation National

Frequency or measurement periodicity Annual

Type Strategic

Cumulative or periodic Cumulative

Unit of measure Individuals and legal entities

Data collection period January to December

Dimension Effectiveness

Information availability February

Expected trend Ascending

Unit responsible for reporting progress Deputy General Directorate of Corporate Strategy

Calculation method Observations

APPLICATION OF THE CALCULATION METHOD FOR OBTAINING THE BASELINE

The baseline must correspond to a definitive value for the 2018 cycle or prior; it cannot be a preliminary or estimated value.

Name Variable 1 Individuals

Variable 1 Value 261,292

Variable 1 Information Source System or report

Name Variable 2 Small

Variable 2 Value 0

Variable 2 Information Source System or report

Name Variable 3 Medium

Variable 3 Value 0

Variable 3 Information Source System or report

Name Variable 4 Large

Variable 4 Value 0

Variable 4 Information Source System or report

Substitution in calculation method (261,280 + 0 + 0 + 0) = 261,292

BASELINE VALUE

Baseline Note on baseline Value 261,292

Year 2018

The parameter contemplates the following premises:

1. Having a sufficient banking technological platform to support growth in the Bank's operations.
2. Having an adequate and sufficient portfolio of products and services.
3. The consolidation of the expansion of the branch network.
4. Having sufficient capital contributions to support the fulfillment of targets.

HISTORICAL SERIES OF THE WELL-BEING TARGET OR PARAMETER

Values must be recorded according to the measurement frequency of the Well-being Target or Parameter.

You can register NA (Not applicable) and ND (Not available) when appropriate.

2012 2013 2014 2015 2016 2017 2018 ND ND ND ND ND ND 261,292

Parameter 2 of Priority Objective 1

WELL-BEING TARGET OR PARAMETER ELEMENTS

Name Financial Inclusion by Gender

Priority Objective Promote greater financial inclusion through access to and use of useful, affordable, and quality financial products and services, strengthening access to financial education and training, as well as promoting schemes that trigger the strengthening of the Bank's service sector and local financial ecosystems.

Definition or description Measures the number of clients served with direct and induced credit to the private sector by Gender (Man - Woman).

Level of disaggregation National

Frequency or measurement periodicity Annual

Type Strategic

Cumulative or periodic Cumulative

Unit of measure Individuals

Data collection period January to December

Dimension Effectiveness

Information availability February

Expected trend Ascending

Unit responsible for reporting progress Deputy General Directorate of Corporate Strategy

Calculation method Observations

APPLICATION OF THE CALCULATION METHOD FOR OBTAINING THE BASELINE

The baseline must correspond to a definitive value for the 2018 cycle or prior; it cannot be a preliminary or estimated value.

Name Variable 1 Women

Variable 1 Value Not available

Variable 1 Information Source Not available

Name Variable 2 Men

Variable 2 Value Not available

Variable 2 Information Source Not available

Substitution in calculation method Not available

BASELINE VALUE

Baseline Note on baseline Value Not available

Year 2018

The parameter contemplates the following premises:

1. Having a sufficient banking technological platform to support growth in the Bank's operations.
2. Having an adequate and sufficient portfolio of products and services.
3. The consolidation of the expansion of the branch network.
4. Having sufficient capital contributions to support the fulfillment of targets.

HISTORICAL SERIES OF THE WELL-BEING TARGET OR PARAMETER

Values must be recorded according to the measurement frequency of the Well-being Target or Parameter.

You can register NA (Not applicable) and ND (Not available) when appropriate.

2012 2013 2014 2015 2016 2017 2018 ND ND ND ND ND ND ND

Parameter 3 of Priority Objective 1

WELL-BEING TARGET OR PARAMETER ELEMENTS

Name Increase in new branches

Priority Objective Promote greater financial inclusion through access to and use of useful, affordable, and quality financial products and services, strengthening access to financial education and training, as well as promoting schemes that trigger the strengthening of the Bank's service sector and local financial ecosystems.

Definition or description Measures the number of new branches.

Level of disaggregation National

Frequency or measurement periodicity Annual

Type Management

Cumulative or periodic Cumulative

Unit of measure Number of branches

Data collection period By December

Dimension Effectiveness

Information availability February

Expected trend Ascending

Unit responsible for reporting progress Deputy General Directorate of Corporate Strategy

Calculation method Number of new branches

Observations

APPLICATION OF THE CALCULATION METHOD FOR OBTAINING THE BASELINE

The baseline must correspond to a definitive value for the 2018 cycle or prior; it cannot be a preliminary or estimated value.

Name Variable 1 Number of new branches

Variable 1 Value

Variable 1 Information Source System or report

Substitution in calculation method Number of new branches

BASELINE VALUE

Baseline Note on baseline Value

Year 2018

The parameter contemplates the following premises:

1. Having sufficient capital contributions to support expansion.
2. Having a sufficient banking technological platform to support growth in the Bank's operations.
3. That the allocation of land for the construction of branches, as well as the construction itself, is carried out effectively, in accordance with the deadlines established.

HISTORICAL SERIES OF THE WELL-BEING TARGET

Values must be recorded according to the measurement frequency of the Well-being Target or Parameter.

You can register NA (Not applicable) and ND (Not available) when appropriate.

2012 2013 2014 2015 2016 2017 2018 ND ND ND ND ND ND

Well-being Target of Priority Objective 2

WELL-BEING TARGET OR PARAMETER ELEMENTS

Name Growth in the Balance of Direct and Induced Credit to the Private Sector

Priority Objective Expand productive promotion schemes, facilitating access to financial services in strategic sectors, through the development of first and second-tier placement strategies.

Definition or description Measures nominal growth in the Balance of Direct and Induced Credit to the Private Sector.

Level of disaggregation National

Frequency or measurement periodicity Annual

Type Strategic

Cumulative or periodic Periodic

Unit of measure Percentage

Data collection period By December

Dimension Effectiveness

Information availability February

Expected trend Ascending

Unit responsible for reporting progress Deputy General Directorate of Corporate Strategy

Calculation method Observations

APPLICATION OF THE CALCULATION METHOD FOR OBTAINING THE BASELINE

The baseline must correspond to a definitive value for the 2018 cycle or prior; it cannot be a preliminary or estimated value.

Name Variable 1 Total amount of the Balance of Direct and Induced Credit to the Private Sector year 2018 (millions of pesos)

Variable 1 Value 2,318.4

Variable 1 Information Source System or report

Name Variable 2 Total amount of the Balance of Direct and Induced Credit to the Private Sector year 2017 (millions of pesos)

Variable 2 Value 2,334.0

Variable 2 Information Source System or report

Substitution in calculation method ((2,318.4 / 2,334.0) - 1) * 100 = -0.7%

BASELINE VALUE AND TARGETS

Baseline Note on baseline Value -0.7%

The baseline is determined with the closing of the 2018 exercise with respect to the closing of the 2017 exercise.

Year 2018

2024 Target Note on the 2024 target 69.2%

It is composed of 11,000 million pesos of balance in 2024 and 6,500 million pesos of balance in 2023.

The fulfillment of the established targets is conditioned on the following premises:

1. Having a sufficient banking technological platform to support growth in the Bank's operations.
2. Having an adequate and sufficient portfolio of products and services.
3. The consolidation of the expansion of the branch network.
4. Having sufficient capital contributions to support the fulfillment of targets.

HISTORICAL SERIES OF THE WELL-BEING TARGET OR PARAMETER

Values must be recorded according to the measurement frequency of the Well-being Target or Parameter.

You can register NA (Not applicable) and ND (Not available) when appropriate.

2012 2013 2014 2015 2016 2017 2018 ND ND ND ND ND ND -0.7%

TARGETS

Only applies to Well-being Targets.

You can register NA when a target does not apply for that year, according to the measurement frequency.

2020 2021 2022 2023 2024 -30.5% 364.7% 18.9% 47.7% 69.2%

Parameter 1 of Priority Objective 2

WELL-BEING TARGET OR PARAMETER ELEMENTS

Name Growth in the Balance of Direct and Induced Credit to the Private Sector by Segment

Priority Objective Expand productive promotion schemes, facilitating access to financial services in strategic sectors, through the development of first and second-tier placement strategies.

Definition or description Measures nominal growth in the Balance of Direct and Induced Credit to the Private Sector by segment.

Level of disaggregation National

Frequency or measurement periodicity Annual

Type Strategic

Cumulative or periodic Periodic

Unit of measure Amount in millions of pesos

Data collection period By December

Dimension Effectiveness

Information availability February

Expected trend Ascending

Unit responsible for reporting progress Deputy General Directorate of Corporate Strategy

Calculation method Observations

APPLICATION OF THE CALCULATION METHOD FOR OBTAINING THE BASELINE

The baseline must correspond to a definitive value for the 2018 cycle or prior; it cannot be a preliminary or estimated value.

Name Variable 1 Amount Individuals (millions of pesos)

Variable 1 Value 672.6

Variable 1 Information Source System or report

Name Variable 2 Amount Legal Entities Small (millions of pesos)

Variable 2 Value 177.9

Variable 2 Information Source System or report

Name Variable 3 Amount Legal Entities Medium (millions of pesos)

Variable 3 Value 0

Variable 3 Information Source System or report

Name Variable 4 Amount Legal Entities Large (millions of pesos)

Variable 4 Value 1,467.9

Variable 4 Information Source System or report

Substitution in calculation method (672.6 + 177.9 + 0 + 1,467.9) = 2,318.4

BASELINE VALUE

Baseline Note on baseline Value 2,318

Figure in millions of pesos

Year 2018

The parameter contemplates the following premises:

1. Having a sufficient banking technological platform to support growth in the Bank's operations.
2. Having an adequate and sufficient portfolio of products and services.
3. The consolidation of the expansion of the branch network.
4. Having sufficient capital contributions to support the fulfillment of targets.

HISTORICAL SERIES OF THE WELL-BEING TARGET OR PARAMETER

Values must be recorded according to the measurement frequency of the Well-being Target or Parameter.

You can register NA (Not applicable) and ND (Not available) when appropriate.

2012 2013 2014 2015 2016 2017 2018 ND ND ND ND ND ND 2,318

Parameter 2 of Priority Objective 2

WELL-BEING TARGET OR PARAMETER ELEMENTS

Name Financing of new credit holders

Priority Objective Expand productive promotion schemes, facilitating access to financial services in strategic sectors, through the development of first and second-tier placement strategies.

Definition or description Measures the Balance of Direct and Induced Credit to the Private Sector of clients served for the first time.

Level of disaggregation National

Frequency or measurement periodicity Annual

Type Strategic

Cumulative or periodic Cumulative

Unit of measure Amount in millions of pesos

Data collection period By December

Dimension Effectiveness

Information availability February

Expected trend Ascending

Unit responsible for reporting progress Deputy General Directorate of Corporate Strategy

Calculation method Observations

APPLICATION OF THE CALCULATION METHOD FOR OBTAINING THE BASELINE

The baseline must correspond to a definitive value for the 2018 cycle or prior; it cannot be a preliminary or estimated value.

Name Variable 1 Individuals

Variable 1 Value Not available

Variable 1 Information Source Not available

Name Variable 2 Legal Entities Small

Variable 2 Value Not available

Variable 2 Information Source Not available

Name Variable 3 Legal Entities Medium

Variable 3 Value Not available

Variable 3 Information Source Not available

Name Variable 4 Legal Entities Large

Variable 4 Value Not available

Variable 4 Information Source Not available

Substitution in calculation method Not available

BASELINE VALUE

Baseline Note on baseline Value Not available

Year 2018

The parameter contemplates the following premises:

1. Having a sufficient banking technological platform to support growth in the Bank's operations.
2. Having an adequate and sufficient portfolio of products and services.
3. The consolidation of the expansion of the branch network.
4. Having sufficient capital contributions to support the fulfillment of targets.

HISTORICAL SERIES OF THE WELL-BEING TARGET OR PARAMETER

Values must be recorded according to the measurement frequency of the Well-being Target or Parameter.

You can register NA (Not applicable) and ND (Not available) when appropriate.

2012 2013 2014 2015 2016 2017 2018 ND ND ND ND ND ND ND

Well-being Target of Priority Objective 3

WELL-BEING TARGET OR PARAMETER ELEMENTS

Name Financial Inclusion by bank accounts

Priority Objective Ensure the effective exercise of the constitutional right to economic support, pensions, scholarships, and other social programs through the expansion of mechanisms for money dispersal, promoting its financial sustainability and the reconstruction of the social fabric.

Definition or description Measures the growth of bank accounts generated in the period.

Level of disaggregation National

Frequency or measurement periodicity Annual

Type Strategic

Cumulative or periodic Periodic

Unit of measure Percentage

Data collection period By December

Dimension Effectiveness

Information availability February

Expected trend Ascending

Unit responsible for reporting progress Deputy General Directorate of Corporate Strategy

Calculation method Observations

APPLICATION OF THE CALCULATION METHOD FOR OBTAINING THE BASELINE

The baseline must correspond to a definitive value for the 2018 cycle or prior; it cannot be a preliminary or estimated value.

Name Variable 1 Number of bank accounts year 2018

Variable 1 Value 17,900,439

Variable 1 Information Source System or report

Name Variable 2 Number of bank accounts year 2017

Variable 2 Value 17,088,281

Variable 2 Information Source System or report

Substitution in calculation method ((17,900,439 / 17,088,281) - 1) * 100 = 4.8%

BASELINE VALUE AND TARGETS

Baseline Note on baseline Value 4.8%

The baseline is determined with the closing of the 2018 exercise with respect to the closing of the 2017 exercise.

Year 2018

2024 Target Note on the 2024 target 2.2%

It is composed of 28,021,799 and 27,416,240 bank accounts in 2024 and 2023 respectively.

The fulfillment of the established targets is conditioned on the following premises:

1. The assignment of the entirety of the beneficiary rolls of the various social programs by the Secretariat of Well-being or any other authorized entity, to carry out the dispersal of resources.
2. The assignment of the payroll of public servants of the Federal Public Administration by the dependencies and entities that make it up to carry out the dispersal of resources.
3. Having a sufficient banking technological platform to support growth in the Bank's operations.
4. Having an adequate and sufficient portfolio of products and services.
5. The consolidation of the expansion of the branch network.

HISTORICAL SERIES OF THE WELL-BEING TARGET

Values must be recorded according to the measurement frequency of the Well-being Target or Parameter.

You can register NA (Not applicable) and ND (Not available) when appropriate.

2012 2013 2014 2015 2016 2017 2018 ND ND ND ND ND ND 4.8%

TARGETS

Only applies to Well-being Targets.

You can register NA when a target does not apply for that year, according to the measurement frequency.

2020 2021 2022 2023 2024 3.9% 17.6% 13.0% 5.4% 2.2%

Parameter 1 of Priority Objective 3

WELL-BEING TARGET OR PARAMETER ELEMENTS

Name Number of new active cards for banking

Priority Objective Ensure the effective exercise of the constitutional right to economic support, pensions, scholarships, and other social programs through the expansion of mechanisms for money dispersal, promoting its financial sustainability and the reconstruction of the social fabric.

Definition or description Measures the number of new active cards for banking.

Level of disaggregation National

Frequency or measurement periodicity Annual

Type Strategic

Cumulative or periodic Cumulative

Unit of measure Cards

Data collection period By December

Dimension Effectiveness

Information availability February

Expected trend Ascending

Unit responsible for reporting progress Deputy General Directorate of Corporate Strategy

Calculation method Total of new active cards for banking.

Observations

APPLICATION OF THE CALCULATION METHOD FOR OBTAINING THE BASELINE

The baseline must correspond to a definitive value for the 2018 cycle or prior; it cannot be a preliminary or estimated value.

Name Variable 1 Total of new active cards for banking

Variable 1 Value Not available

Variable 1 Information Source System or report

Substitution in calculation method Not available

BASELINE VALUE

Baseline Note on baseline Value Not available

Year 2018

The parameter contemplates the following premises:

1. The assignment of the entirety of the beneficiary rolls of the various social programs by the Secretariat of Well-being or any other authorized entity, to carry out the dispersal of resources.
2. The assignment of the payroll of public servants of the Federal Public Administration by the dependencies and entities that make it up to carry out the dispersal of resources.
3. Having a sufficient banking technological platform to support growth in the Bank's operations.
4. Having an adequate and sufficient portfolio of products and services.
5. The consolidation of the expansion of the branch network.

HISTORICAL SERIES OF THE WELL-BEING TARGET

Values must be recorded according to the measurement frequency of the Well-being Target or Parameter.

You can register NA (Not applicable) and ND (Not available) when appropriate.

2012 2013 2014 2015 2016 2017 2018 ND ND ND ND ND ND ND

Parameter 2 of Priority Objective 3

WELL-BEING TARGET OR PARAMETER ELEMENTS

Name Linkage of additional products and services of banked clients

Priority Objective Ensure the effective exercise of the constitutional right to economic support, pensions, scholarships, and other social programs through the expansion of mechanisms for money dispersal, promoting its financial sustainability and the reconstruction of the social fabric.

Definition or description Measures the number of additional accounts and service transactions carried out by banked clients.

Level of disaggregation National

Frequency or measurement periodicity Annual

Type Management

Cumulative or periodic Cumulative

Unit of measure Number of additional accounts and number of services

Data collection period By December

Dimension Effectiveness

Information availability February

Expected trend Ascending

Unit responsible for reporting progress Deputy General Directorate of Corporate Strategy

Calculation method Number of additional accounts per banked client Number of service transactions carried out by banked clients

Observations

APPLICATION OF THE CALCULATION METHOD FOR OBTAINING THE BASELINE

The baseline must correspond to a definitive value for the 2018 cycle or prior; it cannot be a preliminary or estimated value.

Name Variable 1 Number of additional accounts per banked client

Variable 1 Value Not available

Variable 1 Information Source System or report

Name Variable 2 Number of service transactions carried out by banked clients

Variable 2 Value Not available

Variable 2 Information Source System or report

Substitution in calculation method Not available

BASELINE VALUE

Baseline Note on baseline Value ND

Year 2018

The parameter contemplates the following premises:

1. The assignment of the entirety of the beneficiary rolls of the various social programs by the Secretariat of Well-being or any other authorized entity, to carry out the dispersal of resources.

Bienestar or any other authorized entity, to carry out the distribution of resources.

2. The assignment of the payroll of public servants of the Federal Public Administration by the dependencies and entities that comprise it to carry out the distribution of resources.

3. Having a sufficient banking technological platform that supports the growth in the Bank's operations.

4. Having an adequate and sufficient portfolio of products and services.

5. The consolidation of the expansion of the branch network.

HISTORICAL SERIES OF THE GOAL FOR WELL-BEING

Values shall be recorded in accordance with the frequency of measurement of the Well-being Goal or Parameter.

NA (Not applicable) and ND (Not available) may be recorded when appropriate.

2012

2013

2014

2015

2016

2017

2018

ND

ND

ND

ND

ND

ND

ND

8.- Epilogue: Vision towards the future

In accordance with what is established in the Institutional Program of the Banco del Bienestar 2020-2024, the institution will transition to an ethical and social banking institution to make effective the right of access to development, to economic, social, and financial inclusion, as well as to guarantee access to the support, pensions, and scholarships established in the Constitution.

The Banco del Bienestar will be the social banking institution of the Mexican State that promotes universal access to financial services for inclusion, development, and the full exercise of human rights of the entire population, with the greatest territorial proximity in the regions of the country.

For this purpose, the Banco del Bienestar will transform the service and attention model in order to achieve that more and more vulnerable communities have the necessary conditions to reduce poverty, through financial tools within everyone's reach, as well as the expansion and strengthening of the presence and role of development banking, which will allow boosting economic growth and social well-being in vulnerable zones.

The above will allow boosting sustainable development, inclusion, and the deepening of the financial system in favor of the population's well-being and the efficient allocation of resources.

Financial inclusion accompanied by new products and services will facilitate that people assume a healthy financial culture that is reflected in personal, family, and community economics, contributing to the development of the social economy in their communities. The presence of a space where financial development takes root in communities and towns will achieve economic stability that allows creating regional and intergenerational financial well-being.

The General Director, Mtra. Diana Álvarez Maury. - Signature.

CERTIFICATION

RAFAEL CASTAÑEDA FERNÁNDEZ in my capacity as Secretary of the Board of Directors of the BANCO DEL BIENESTAR, S.N.C., DEVELOPMENT BANKING INSTITUTION, certify for all legal effects, that the Board of Directors of said institution in its one hundred and forty-second ordinary session, held on December 31, 2020, in the discharge of the Third point, subsection D) of the Agenda, unanimously adopted the following resolution:

" RESOLUTION CD.142.3.4. In view of the considerations exposed, based on the provisions of articles 21, 22, fraction IV, and 25, fraction XXXII of the Organic Law of the Banco del Bienestar, 20, 21, fraction IV, and 23, fraction XXXI of its Organic Regulations, and taking into consideration articles 42, first paragraph, 43, first paragraph, 44 Bis 2, 44 Bis 5 of the Credit Institutions Law, 47, 48, 49, and 59, fraction II of the Federal Law of Parastatal Entities, articles 21, 22, and 24 of the Planning Law, the Board of Directors approves the Institutional Program 2020-2024, in the terms exposed. "

This certification is issued in Mexico City, on the twenty-second day of the month of February of two thousand twenty-one.

The Secretary of the Board of Directors, Rafael Castañeda Fernández. - Signature.

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6.50%

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Official Gazette of the Federation

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