There are six million postal financial accounts in Tunisia. For a population of 11 million, this is one of the highest ratios in the world.
No wonder that in a recent survey on financial literacy, La Poste is the best known and first cited financial institution, before commercial banks Banque Tunisienne de Solidarité (BTS) or Enda, one of the largest microfinance institutions in Tunisia. In a country where approximately half of the economically active population does not have access to the formal banking sector , Findex shows that 90% of Tunisians who have a formal account, are actually banked with La Poste.
Yet La Poste is not a bank. Nor is it a microfinance institution. As many other postal operators shaped after the French model, it is a hybrid operator of a broad variety of services. I like to look at it as a platform of service delivery, not simply a window that sells stamps. Its business model is in fact quite complex, and hides many potential sources of improvement.
La Poste is a powerful instrument for financial inclusion because it sells simple and affordable products to a public which, for the most part, is excluded from the higher end financial institutions. And it has a widespread presence throughout the country – 1,050 post offices.
Photo by Ghar El Melh Photo Citizen59
La Poste has intensively made use of information and communication technology (ICT) to be ubiquitous and accessible. E-Dinar (smartcard), Fatoura Net (electronic bill payment) and Mobi-Flouss (electronic money transfers) are all postal financial services that have been developed and commercialized by La Poste. La Poste is managing about 700,000 cards, which is nearly one-third of the total cards issued in Tunisia. With its high volume of electronic transactions – 1.8 million per month – La Poste is a robust, trusted institution which has partnered with several financial institutions to start to diversify its offerings and better meet customer demand.
For example, La Poste offers two long-term savings products in partnership with the insurance company La Carte: Minha, a long-term savings plan for university education for children, and Motmen, a retirement savings plan that extends for at least 10 years. It has partnered with Western Union and Moneygram to cater to international money transfer customers, and has developed a whole range of services for non-resident Tunisians, most of them accessible online, including checking accounts in convertible dinars. Additionally, in partnership with Tunisiana, La Poste launched "Cash Mandates Minute" through its mobile payment platform, Mobi-Flouss.
While trying to expand its financial services, La Poste Tunisienne is facing multiple challenges. The most obvious one resides in its lack of market intelligence tools. La Poste is not a customer-oriented organization, and does not know how to adapt its products and services to its customers’ needs. Cost-oriented pricing is unknown territory for La Poste, which is used to submitting its tariffs every year to its line ministry where changes are often solely dictated by administrative considerations. It is a long and difficult process to transform a postal administration into a competitive provider of financial services.
What would it take to make La Poste an even greater contributor to financial inclusion in Tunisia? Along with CGAP analysis completed last year, I would point to three key levels of transformation: governance and management, marketing and product development, and information systems and capacity building.
La Poste remains a state-owned entity protected by a monopoly of most of its postal market, managed by bureaucratic rules and staffed with about 10,000 civil servants. Concepts such as efficiency, productivity or profitability are not part of the culture. ICT-based innovation is the only feature that has given La Poste a competitive edge. With this background, corporatizing La Poste and modifying its overall governance framework would be a key first step.
Enhancing its market intelligence and product development capacity would be a second significant element to improving its contribution to financial inclusion. This could help reactivate the large number of dormant accounts, possibly through adjustment to product features such as interest rates and liquidity.
Finally, La Poste would benefit by upgrading its management and information systems to capture better operational and financial information about its numerous products and services. Without a more sophisticated cost accounting system, La Poste cannot properly analyze the cost factors or easily identify sources of inefficiencies.
The fact that its products and services are delivered through a shared platform to which “universal service obligations” are linked, makes it an absolute necessity to distinguish profit and cost centers. Those three level of transformation are intertwined and not an easy endeavor. Now that a new constitution and a new government are in place, there is no better time to make this transformation happen.