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This Focus Note presents CGAP's observations on its early experiences with branchless banking. It addresses each of the elements and players in the branchless banking delivery chain, including customers, financial service providers, agents, products, and technology platforms.
This Focus Note presents an alternative, systemic approach to branchless banking in which there is no need for a bank to have a contractual relationship with any of the retail outlets through which it is absorbing deposits or meeting liquidity needs of its customers.
This Focus Note is based on assessments of policy and regulation in seven key countries. Current regulation tends to be both over- and under- protective, and policy will determine not only where branchless banking is allowed, but also which business models turn out to make economic sense -- and how far they will go in reaching poor people.
This Focus Note examines the experience of five pioneering countries--Brazil, India, South Africa, the Philippines, and Kenya--where agent-assisted branchless banking that targets poor customers is already a reality. It introduces the main issues involved in regulating branchless banking, particularly regarding the use of retail agents.
Some of the innovations commercial banks need to service poor clients may be found in information and communications technologies (ICTs).This Focus Note addresses the following questions: Can banking technologies, applied innovatively in developing countries, make microfinance profitable for formal financial institutions? Will they reduce costs to such an extent that banks could profitably serve even those whom MFIs have mostly excluded to date, such as very poor and remote rural customers? Will these customers be comfortable using technology?
New technologies are available to help microfinance providers improve efficiency, track operations more accurately, increase transparency, and reach new customers, yet MFIs struggle to select the right technologies and get the most from their investments. This Donor Brief offers guidance on how to ensure microfinance providers follow good investment and management principles when choosing and implementing new technologies.
(adapted from Elizabeth Littlefield and Richard Rosenberg, "Microfinance and the Poor: Breaking Down the Walls between Microfinance and Formal Finance," Finance & Development 41, no. 2 (June 2004): 38-40)
There is a dawning understanding that developing countries' financial systems need to be more accessible to poor people and that there are practical ways to make this happen. All kinds of financial institutions--regulators, mainstream rating agencies, commercial and state banks, insurance companies, and credit bureaus--are starting to play a part in developing sound, inclusive financial systems that serve the majority of poor countries citizens.
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