We have previously discussed on this blog how consumer goods retailers can be part of the financial inclusion landscape. Today, we start to expand on that theme, explaining briefly why retailers are an exciting opportunity for financial inclusion but how that opportunity is not present in every market and, where it is present, how certain types of retailers could place themselves better to serve low-income consumers.
When we launched Jipange KuSave – a mobile-only savings product – in Kenya in early 2010, our goal was to out-compete the mattress. Back then, Safaricom’s M-PESA service was in hyper-growth phase and ramping up to become the de facto national retail payment system. But even more exciting was M-PESA’s potential as a pervasive and low-cost delivery channel for a wider set of financial services.
Until recently, Zoona, formerly known as Mobile Transactions could have been considered the best kept secret in Africa. Operating in Zambia on a shoe-string budget, they have been developing their own unique business model for electronic financial services slowly and with little media attention. Now, as of February 2012, this small company has secured investments from three big investors, Omidyar Network, ACCION Frontier Investments, and Sarona Asset Management. All three are banking on the fact that Zoona’s experience and innovative approach to serving a range of consumers situates them to fill crucial gaps in the mobile money transactions and payments market in Africa.
The biggest challenge when it comes to the business case for banks is that the amount per grant payment is small, and as client research has shown, very little of each payment is left behind in the form of savings.
Our recently released Focus Note on Social Cash Transfers and Financial Inclusion looks at the evidence from four large and well established programs in Brazil, Colombia, Mexico and South Africa to attempt to answer three broad questions that are relevant to different stakeholder groups.
For the last year CGAP has conducted quantitative research on the challenge of inactive customers. In culmination of this research, we are releasing a deck that helps providers understand and develop strategies to address low customer activity in their services.
We’ve done a lot of thinking at CGAP about the different business models and partnerships that exist in branchless banking. What I find interesting is that rarely do you find two models that look exactly alike. Once you begin to really dig beneath the surface, you realize that even among those businesses that we might simplistically call “telco-led” or “bank-led”, there are significant differences.