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The use of technology in financial inclusion greg chen, cgap

The use of technology in financial inclusion greg chen, cgap






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  • Bank-led model, sample withdrawal transaction.
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The use of technology in financial inclusion greg chen, cgap The use of technology in financial inclusion greg chen, cgap Presentation Transcript

  • The Use of Technology in Financial Inclusion Greg Chen December 1, 2011 www.e-asia.org
  • What are the factors that limit access? Branchless banking may overcome these constraints Long distances & low pop density High bank costs relative to income Low education & illiteracy Poor product/ channel design www.e-asia.org
  • Branchless Banking: What do we mean? “… delivery of financial services outside conventional bank branches using information and communications technologies and nonbank retail agents.” www.e-asia.org Bank Agent Client MNO
  • Branchless Banking: Cash-in Client opens bank account (accessible by mobile phone) Agent opens bank account (accessible by mobile phone) 2 Cash-in 3 Electronic value sent 4 Agent account debited Client account credited 1 1 - + www.e-asia.org Bank Client Agent
  • Reducing the cost of banking infrastructure www.e-asia.org Branch in store $50,000 ATM $10,000 No agent (cashless) $0 Agent with POS terminal $2,000 Agent with mobile $400 Traditional branch $250,000
  • 12 stylized facts about branchless banking in 2011 CGAP’s Branchless Banking Database – February 2011 http://www.cgap.org/p/site/c/template.rc/1.9.49977/ www.e-asia.org
  • Fact 1 www.e-asia.org Sources: CGAP, Wireless Intelligence 3.3 bil unique mobile owners 1.4 bil
  • Fact 2 www.e-asia.org 2x Sources: CGAP, Wireless Intelligence
  • Fact 3 www.e-asia.org 51% Average cost per withdrawal transaction for 4 Mexican and Colombian banks Source: CGAP analysis
  • Fact 4 www.e-asia.org 36% Source: CGAP Financial Access (2010, 2009)
  • Fact 5 www.e-asia.org BBI active, previously unbanked clients Sources: CGAP, The MIX Markets: Brazil, Cambodia, India, Kenya, Philippines, S. Africa, Tanzania
  • Fact 6 www.e-asia.org Source: CGAP analysis, company financial statements 2009 & 2010
  • Fact 7 www.e-asia.org Sources: CGAP, Coffee
  • Fact 8 www.e-asia.org Source: CGAP analysis At least 170 mil mass market G2P recipients worldwide Source: CGAP analysis
  • Fact 9 www.e-asia.org Understand customer pain points moving money over time, not just distance Source: BFA and CGAP
  • Fact 10 www.e-asia.org Source: CGAP analysis; PPP=purchasing power parity
  • Fact 11 www.e-asia.org Source: CGAP analysis
  • Fact 12 www.e-asia.org Hasita INDIA $0.91 $0.32 $4.11 Vincent KENYA Denise BRAZIL Source: CGAP analysis Daily Agent Profits (USD) Source: CGAP analysis But a universal requirement is understanding the agent’s business case
  • Key areas to focus on 2. Business Models 3. Distribution Networks: Agents 4. Activating Customers 1. Consumer Insights 5. G2P & International Remittances 6. Policy & Regulation www.e-asia.org
  • Following learnings on branchless banking http://technology.cgap.org/ www.e-asia.org
  • www.e-asia.org