Note 4 examines why bank account ownership is not translating into meaningful usage in MAP pilot countries. It finds that while bank account ownership has increased, usage is not keeping pace. Many account holders are using their accounts merely as "mailboxes" - withdrawing their entire deposits as soon as they are made. This results in consumers incurring costs but receiving little value from their accounts. The note questions whether bank accounts are always the appropriate product to improve consumer welfare, given existing conditions, and argues policymakers should focus on a wider systems approach to enable active account usage.
Local financial services persist in popularity despite efforts to promote formal alternatives. Local services are valued for their accessibility, convenience, and flexibility. Decision-making is local, so providers have direct knowledge of customers and context allowing for personalized, responsive service including negotiation and complaint resolution. While forms of local provision vary, what defines them as local is decision-making proximity to customers rather than legal formality or collective/individual structure.
The note analyzes bank account usage patterns in six MAP pilot countries. It finds that while bank account ownership has increased significantly, actual usage of accounts is lagging behind and many accounts are essentially being used as "mailboxes" - where funds are deposited and immediately withdrawn, providing little benefit to consumers. This limited usage undermines the value of financial inclusion initiatives for consumers, policymakers, and financial providers. The note questions the assumption that increasing bank account access alone is sufficient, and argues that usage must be actively encouraged by addressing barriers like costs of accessing accounts. It suggests financial inclusion policies should prioritize improving the enabling infrastructure to facilitate active usage of accounts at affordable costs.
This document summarizes key insights from the MAP (Making Access Possible) program, which conducted financial inclusion diagnostics in six countries. Three main insights are discussed:
1) Financial inclusion initiatives have often not delivered significant value or impact on people's lives, with many bank accounts unused and cash remaining dominant. Traditional indicators focused too narrowly on access.
2) People continue choosing informal financial services not because of lack of access to formal options, but deliberately due to the local nature and better meeting of needs compared to formal services.
3) A paradigm shift is needed in how financial inclusion is conceptualized, away from a focus on providers and formality and toward understanding consumer behavior, needs, and value to unlock financial
The document discusses shifting financial inclusion measurement away from solely measuring breadth (the number of people accessing any formal financial service) to also measuring depth (the number of different financial product classes used per person). It argues that focusing only on breadth provides an incomplete picture, as evidence shows people rely on portfolios of financial products. Introducing a depth measurement provides more granular insights into levels of financial inclusion and usage. Measuring depth within product classes is also important to fully understand people's financial lives and needs. The document uses data from FinScope surveys in six countries to demonstrate how measuring both breadth and depth provides a more accurate view of financial inclusion.
This document summarizes the findings of a CGAP survey of the global outreach of alternative financial institutions (AFIs), which include microfinance institutions (MFIs) as well as other institutions that aim to serve clients below the level served by commercial banks. The survey found over 750 million savings and loan accounts across AFIs globally. However, it cannot be concluded that this represents the number of poor and near-poor clients served, as the data includes clients from various economic levels and the percentage of poor vs non-poor clients is unknown. While MFIs accounted for 18% of total accounts, other AFIs like credit unions, rural banks, and postal savings banks collectively account for the large majority and also
This report was commissioned by NetHope with a charitable contribution from Visa's Financial Inclusion Unit. Research for this study, both primary and secondary, was conducted by Deloitte Touche Tohmatsu India LLP.
1) Cash continues to play a dominant role in consumer spending, accounting for 40% of all consumer transactions based on number, though only 14% based on value.
2) Cash is used most frequently for small-value transactions under $50, accounting for half of such transactions on average.
3) Cash remains widely used across various spending categories, including food, entertainment, and services, even where alternative payment options are typically available.
4) Consumer payment preferences strongly influence payment choice, with those preferring cash using it for about half their transactions on average, while preferences also correlate with factors like age, income level, and access to financial products.
The document provides a summary of data on debit card transactions in the United States in 2013. Some key findings include:
- Total debit card transaction volume grew 6.8% in 2013 to 53.7 billion transactions valued at $2.07 trillion.
- Transactions processed over dual-message networks grew faster than those over single-message networks, at rates of 9.1% and 2.6% respectively.
- Card-not-present transactions grew the fastest of any category at 18.1%, though they still only accounted for 13.0% of total transactions.
- Average interchange fees, network fees, and fraud losses remained relatively stable compared to previous years. The majority of covered issu
Local financial services persist in popularity despite efforts to promote formal alternatives. Local services are valued for their accessibility, convenience, and flexibility. Decision-making is local, so providers have direct knowledge of customers and context allowing for personalized, responsive service including negotiation and complaint resolution. While forms of local provision vary, what defines them as local is decision-making proximity to customers rather than legal formality or collective/individual structure.
The note analyzes bank account usage patterns in six MAP pilot countries. It finds that while bank account ownership has increased significantly, actual usage of accounts is lagging behind and many accounts are essentially being used as "mailboxes" - where funds are deposited and immediately withdrawn, providing little benefit to consumers. This limited usage undermines the value of financial inclusion initiatives for consumers, policymakers, and financial providers. The note questions the assumption that increasing bank account access alone is sufficient, and argues that usage must be actively encouraged by addressing barriers like costs of accessing accounts. It suggests financial inclusion policies should prioritize improving the enabling infrastructure to facilitate active usage of accounts at affordable costs.
This document summarizes key insights from the MAP (Making Access Possible) program, which conducted financial inclusion diagnostics in six countries. Three main insights are discussed:
1) Financial inclusion initiatives have often not delivered significant value or impact on people's lives, with many bank accounts unused and cash remaining dominant. Traditional indicators focused too narrowly on access.
2) People continue choosing informal financial services not because of lack of access to formal options, but deliberately due to the local nature and better meeting of needs compared to formal services.
3) A paradigm shift is needed in how financial inclusion is conceptualized, away from a focus on providers and formality and toward understanding consumer behavior, needs, and value to unlock financial
The document discusses shifting financial inclusion measurement away from solely measuring breadth (the number of people accessing any formal financial service) to also measuring depth (the number of different financial product classes used per person). It argues that focusing only on breadth provides an incomplete picture, as evidence shows people rely on portfolios of financial products. Introducing a depth measurement provides more granular insights into levels of financial inclusion and usage. Measuring depth within product classes is also important to fully understand people's financial lives and needs. The document uses data from FinScope surveys in six countries to demonstrate how measuring both breadth and depth provides a more accurate view of financial inclusion.
This document summarizes the findings of a CGAP survey of the global outreach of alternative financial institutions (AFIs), which include microfinance institutions (MFIs) as well as other institutions that aim to serve clients below the level served by commercial banks. The survey found over 750 million savings and loan accounts across AFIs globally. However, it cannot be concluded that this represents the number of poor and near-poor clients served, as the data includes clients from various economic levels and the percentage of poor vs non-poor clients is unknown. While MFIs accounted for 18% of total accounts, other AFIs like credit unions, rural banks, and postal savings banks collectively account for the large majority and also
This report was commissioned by NetHope with a charitable contribution from Visa's Financial Inclusion Unit. Research for this study, both primary and secondary, was conducted by Deloitte Touche Tohmatsu India LLP.
1) Cash continues to play a dominant role in consumer spending, accounting for 40% of all consumer transactions based on number, though only 14% based on value.
2) Cash is used most frequently for small-value transactions under $50, accounting for half of such transactions on average.
3) Cash remains widely used across various spending categories, including food, entertainment, and services, even where alternative payment options are typically available.
4) Consumer payment preferences strongly influence payment choice, with those preferring cash using it for about half their transactions on average, while preferences also correlate with factors like age, income level, and access to financial products.
The document provides a summary of data on debit card transactions in the United States in 2013. Some key findings include:
- Total debit card transaction volume grew 6.8% in 2013 to 53.7 billion transactions valued at $2.07 trillion.
- Transactions processed over dual-message networks grew faster than those over single-message networks, at rates of 9.1% and 2.6% respectively.
- Card-not-present transactions grew the fastest of any category at 18.1%, though they still only accounted for 13.0% of total transactions.
- Average interchange fees, network fees, and fraud losses remained relatively stable compared to previous years. The majority of covered issu
Volume Growth and Valuation Contraction Global Microfinance Equity Valuation ...Dr Lendy Spires
The document discusses the findings of the 2012 Global Microfinance Equity Valuation Survey conducted by CGAP and J.P. Morgan. It finds that while the volume of microfinance private equity deals and investments grew significantly in 2011, valuation multiples continued to decline from their peak in 2010. The survey covered 68 private equity transactions worth $292 million in 2011. Regional trends saw Latin America and the Caribbean accounting for over half of investments, while sub-Saharan Africa saw the strongest growth. Valuations contracted across most regions on continued concerns about asset quality and regulatory uncertainty in India.
Multi Country Data Sources for Access toFinanceDr Lendy Spires
This document reviews various multi-country data sources related to access to finance and microfinance. It identifies four main categories of data gaps: 1) measuring financial inclusion outreach, 2) understanding the costs and barriers to accessing financial products, 3) learning how customers use financial services, and 4) tracking funding flows to microfinance. While some data sources provide information on specific topics, comprehensive and standardized data is still lacking. Definitional issues and lack of coordination between surveys hamper comparisons across countries.
Overcoming the Demographic Disadvantages of Community Banking (jan 2012)Paul McAdam
Community banks are at a disadvantage in terms of customer relationship expansion, mostly because the community bank customer base has less income and future earnings potential. The affluence gap between the community bank customer and the average bank customer results in community bank customers holding lower-than-average investable assets and loans overall, with correspondingly less opportunity. This article examines the degree to which customer demographics and geographic location influence both the composition and the financial behaviors of community bank customers and points out where community banks are really missing out.
By Paul McAdam
SVP, Research & Thought Leadership
Fidelity National Information Services
Allen & Overy Report - Funding European business: Harnessing alternatives | N...Rafal Wasyluk
Zgodnie z wynikami badań opublikowanych przez międzynarodową kancelarię prawną Allen & Overy europejskie spółki z rosnącym zainteresowaniem korzystają z alternatywnego finansowania – z tego źródła pochodzi już ok. jedna trzecia (30%) pozyskanych przez nie środków. Rynek jest jednak nadal podzielony i w dużej mierze krajowy. W związku z tym cała branża musi podjąć starania w celu stworzenia standardu umożliwiającego wykorzystanie niejednorodnych źródeł kapitału zlokalizowanych na całym europejskim kontynencie.
The survey found that alternative finance continues to be an important component of corporate funding in Europe, making up 30% of corporate funding on average across the countries surveyed. While bank lending and capital markets activity increased in 2015, alternative finance maintained its market share. There was significant variation between countries, with France seeing strong growth in alternative finance and the UK and Italy seeing declines. Corporates and investors showed no strong preference for loans over bonds or direct funding over intermediated funding. Both groups were agnostic to funding form, indicating potential for standardization to further develop the market. National borders remained significant for alternative finance providers' locations, though cross-border activity was growing. A variety of organizations provided alternative funding, with some country-level differences
Globalization Of Microfinance Banca Regional AndinoShuvabrata Nandi
The document analyzes the potential for a common banking platform between three microfinance institutions in Latin America - BancoSol in Bolivia, Mibanco in Peru, and BSE in Ecuador. It finds that while the institutions share a common philosophy, their operations and financial profiles differ substantially. A common platform could provide some efficiencies but also risks reducing competitiveness and increasing mission drift. A full merger faces even more challenges around regulatory hurdles and political risk in the different countries. Overall, the document cautions that both collaboration and consolidation in microfinance require careful management to balance social and financial objectives.
Building profitable relationships with multichannel consumersPaul McAdam
Building Profitable Relationships with Multi-Channel Consumers is the first in a series of Consumer Insight Briefs based on primary research conducted by FIS™ Enterprise Strategy. The research findings are based on a 42-question, online survey completed by more thanover 4,000 U.S. consumers in early September 2010. The survey was fielded by FIS Enterprise Strategy to a consumer panel maintained by Survey Sampling International. The estimated margin of error rate for this sample is +/-1.6% to 2.3%.
Submission to commission on banking standards sdj 08 02 13 final Simon Deane-Johns
This submission discusses the crisis in the UK retail finance market and the growth of alternative finance models. It notes that small businesses face a funding gap of up to £59 billion, while over 90% rely on four major banks for financing. New models like peer-to-peer lending, supply chain finance, and marketplace finance are emerging to fill this gap. Peer-to-peer platforms allow individuals and small businesses to directly agree loan and investment terms without pre-packaged bank products. Regulatory barriers currently favor traditional banks over alternative finance providers. Reforms are needed to level the playing field.
FIS Research - Accelerating Paper Check MigrationPaul McAdam
Recent research conducted by FIS with 3,205 consumers reveals that migration away from paper checks to debit card, credit card, automated clearing house and other electronic payment services could be accelerated through a combination of motivators and removal of barriers especially for consumer-to-consumer payments. The demise of paper checks would represent a substantial expense reduction for financial institutions as well as revenue enhancement opportunity through shifting check volume to card payments, which generate interchange revenue. However, checks won’t disappear overnight and likely won’t decline much at all among some consumers without significant intervention.
This document provides findings from research into consumer behavior and attitudes regarding mobile deposit services from large financial institutions. Some key findings include:
- Mobile deposit adoption has grown rapidly, with 40% of existing users adopting in the past year. It is becoming a mainstream banking capability.
- Myths that paper checks are only used by older generations and millennials don't use them are busted, as all age groups receive a similar number of checks monthly.
- Ease of use, faster access to funds, and assurances that checks were deposited successfully and securely are top motivators for using mobile deposit more.
11.management of savings and credit cooperatives from the perspective of outr...Alexander Decker
This document summarizes a research study on the management of savings and credit cooperatives (SACCOs) in Southern Tigrai, Ethiopia from 2007 to 2010. The study assessed the growth and performance of 10 SACCOs in terms of outreach to members and financial sustainability. Key findings include:
1) Membership in the SACCOs increased over the study period, with an average growth rate of 25.08% from 2007 to 2010. Total membership across the 10 SACCOs rose from 860 in 2007 to 1,037 in 2010.
2) Total deposits and credits disbursed by the SACCOs also increased substantially over the study period, with average annual
Management of savings and credit cooperatives from the perspective of outreac...Alexander Decker
This document summarizes a research study on the management of Savings and Credit Cooperatives (SACCOs) in Southern Tigrai, Ethiopia from the perspectives of outreach and sustainability. The study analyzed data from SACCO members and documentation to examine relationships between growth measures like membership, loan portfolio size, and financial performance indicators. It found a positive correlation between asset utilization and financial performance, as well as between operational efficiency and asset size. However, operational efficiency was negatively correlated with financial performance. Factors like lack of awareness, weak governance, policy issues, and competition negatively impacted outreach and sustainability. The study concluded rural SACCOs can effectively link urban liquidity to rural credit needs if well-managed for
1) The document discusses opportunities and challenges for banks operating in emerging markets, focusing on 10 rapid-growth markets identified as the next wave beyond the BRICs.
2) Banks in these markets face common challenges around serving unbanked customers without developed infrastructure and meeting growing demand for lending with constrained balance sheets.
3) To achieve profitable growth, banks must balance rapid expansion with efficiency gains, through initiatives like low-cost retail products, strong corporate and investment banking capabilities, advisory services, and new wealth management products.
VOZ EXCLUSIVA FM EMISORA DEDICADA AL IMPULSO DE LA CULTURA REGIONAL, NACIONAL E INTERNACIONAL;NUESTRA AUTENTICIDAD HACE DE NOSOTROS UN ESTANDARTE, QUE LE APORTA A LA SOCIEDAD VALORES, ENTRETENIMIENTO Y VARIEDAD MUSICAL. ESCÚCHENOS EN : www.funiseh.com.co
Este documento resume la teoría de las inteligencias múltiples propuesta por Howard Gardner, la cual sostiene que la inteligencia no es un elemento unitario sino múltiple e independiente. Describe ocho tipos de inteligencia: lingüística, lógico-matemática, espacial, corporal-cinestésica, musical, interpersonal, intrapersonal y naturalista.
El documento describe la presentación clínica, estructura y factores de virulencia de Streptococcus pyogenes, así como las patologías asociadas como faringitis, erisipela, celulitis y fascitis necrotizante. También discute otros agentes etiológicos de infecciones del tracto respiratorio superior e inferior como neumonía y sinusitis, así como su diagnóstico y tratamiento.
El poema "Siempre nocturno" de Ana Rossetti describe una noche de insomnio en la que la ginebra provoca visiones y deseos mientras suena una música agotadora. Al amanecer solo queda sangre delgada y la despedida. Ana Rossetti es una poeta italo-española conocida por su obra poética que combina erotismo, esteticismo y culturalismo, aunque también ha escrito teatro, una ópera y narrativa. Se la considera una de las mejores poetas de la poesía española contemporá
El documento presenta una introducción al estado de la investigación sobre glaucoma, incluyendo una línea cronológica de quiénes han trabajado en la temática, fuentes primarias y secundarias relevantes, e información sobre realizar buenas búsquedas en inglés, español y francés. También proporciona un ejemplo de tabla sobre un estudio de 2009 que encontró que latanoprost redujo las concentraciones de TGF-B1 en pacientes con glaucoma secundario.
Bacterio F. Pseudomonadaceae - Fund. BarcelóDaniel Borba
Este documento describe las características de varias bacterias Gram negativas no fermentadoras de glucosa como Pseudomonas aeruginosa, Acinetobacter spp., Stenotrophomonas maltophilia y Legionella pneumophila. Detalla sus propiedades microbiológicas, mecanismos de patogenicidad, resistencia a antibióticos, manifestaciones clínicas e implicaciones en infecciones hospitalarias.
The document discusses customer segmentation analysis conducted in several countries as part of the Making Access Possible (MAP) program. Six common customer segments were identified: salaried workers, farmers, self-employed individuals, irregular earners, dependants, and migrants. Each segment has distinct demographic characteristics, income levels, occupations, and financial needs. Understanding these differences is important for developing targeted policies, products, and services to better promote financial inclusion among various groups. The segmentation approach provides insights to help tailor solutions to the unique needs and realities of each customer segment.
Volume Growth and Valuation Contraction Global Microfinance Equity Valuation ...Dr Lendy Spires
The document discusses the findings of the 2012 Global Microfinance Equity Valuation Survey conducted by CGAP and J.P. Morgan. It finds that while the volume of microfinance private equity deals and investments grew significantly in 2011, valuation multiples continued to decline from their peak in 2010. The survey covered 68 private equity transactions worth $292 million in 2011. Regional trends saw Latin America and the Caribbean accounting for over half of investments, while sub-Saharan Africa saw the strongest growth. Valuations contracted across most regions on continued concerns about asset quality and regulatory uncertainty in India.
Multi Country Data Sources for Access toFinanceDr Lendy Spires
This document reviews various multi-country data sources related to access to finance and microfinance. It identifies four main categories of data gaps: 1) measuring financial inclusion outreach, 2) understanding the costs and barriers to accessing financial products, 3) learning how customers use financial services, and 4) tracking funding flows to microfinance. While some data sources provide information on specific topics, comprehensive and standardized data is still lacking. Definitional issues and lack of coordination between surveys hamper comparisons across countries.
Overcoming the Demographic Disadvantages of Community Banking (jan 2012)Paul McAdam
Community banks are at a disadvantage in terms of customer relationship expansion, mostly because the community bank customer base has less income and future earnings potential. The affluence gap between the community bank customer and the average bank customer results in community bank customers holding lower-than-average investable assets and loans overall, with correspondingly less opportunity. This article examines the degree to which customer demographics and geographic location influence both the composition and the financial behaviors of community bank customers and points out where community banks are really missing out.
By Paul McAdam
SVP, Research & Thought Leadership
Fidelity National Information Services
Allen & Overy Report - Funding European business: Harnessing alternatives | N...Rafal Wasyluk
Zgodnie z wynikami badań opublikowanych przez międzynarodową kancelarię prawną Allen & Overy europejskie spółki z rosnącym zainteresowaniem korzystają z alternatywnego finansowania – z tego źródła pochodzi już ok. jedna trzecia (30%) pozyskanych przez nie środków. Rynek jest jednak nadal podzielony i w dużej mierze krajowy. W związku z tym cała branża musi podjąć starania w celu stworzenia standardu umożliwiającego wykorzystanie niejednorodnych źródeł kapitału zlokalizowanych na całym europejskim kontynencie.
The survey found that alternative finance continues to be an important component of corporate funding in Europe, making up 30% of corporate funding on average across the countries surveyed. While bank lending and capital markets activity increased in 2015, alternative finance maintained its market share. There was significant variation between countries, with France seeing strong growth in alternative finance and the UK and Italy seeing declines. Corporates and investors showed no strong preference for loans over bonds or direct funding over intermediated funding. Both groups were agnostic to funding form, indicating potential for standardization to further develop the market. National borders remained significant for alternative finance providers' locations, though cross-border activity was growing. A variety of organizations provided alternative funding, with some country-level differences
Globalization Of Microfinance Banca Regional AndinoShuvabrata Nandi
The document analyzes the potential for a common banking platform between three microfinance institutions in Latin America - BancoSol in Bolivia, Mibanco in Peru, and BSE in Ecuador. It finds that while the institutions share a common philosophy, their operations and financial profiles differ substantially. A common platform could provide some efficiencies but also risks reducing competitiveness and increasing mission drift. A full merger faces even more challenges around regulatory hurdles and political risk in the different countries. Overall, the document cautions that both collaboration and consolidation in microfinance require careful management to balance social and financial objectives.
Building profitable relationships with multichannel consumersPaul McAdam
Building Profitable Relationships with Multi-Channel Consumers is the first in a series of Consumer Insight Briefs based on primary research conducted by FIS™ Enterprise Strategy. The research findings are based on a 42-question, online survey completed by more thanover 4,000 U.S. consumers in early September 2010. The survey was fielded by FIS Enterprise Strategy to a consumer panel maintained by Survey Sampling International. The estimated margin of error rate for this sample is +/-1.6% to 2.3%.
Submission to commission on banking standards sdj 08 02 13 final Simon Deane-Johns
This submission discusses the crisis in the UK retail finance market and the growth of alternative finance models. It notes that small businesses face a funding gap of up to £59 billion, while over 90% rely on four major banks for financing. New models like peer-to-peer lending, supply chain finance, and marketplace finance are emerging to fill this gap. Peer-to-peer platforms allow individuals and small businesses to directly agree loan and investment terms without pre-packaged bank products. Regulatory barriers currently favor traditional banks over alternative finance providers. Reforms are needed to level the playing field.
FIS Research - Accelerating Paper Check MigrationPaul McAdam
Recent research conducted by FIS with 3,205 consumers reveals that migration away from paper checks to debit card, credit card, automated clearing house and other electronic payment services could be accelerated through a combination of motivators and removal of barriers especially for consumer-to-consumer payments. The demise of paper checks would represent a substantial expense reduction for financial institutions as well as revenue enhancement opportunity through shifting check volume to card payments, which generate interchange revenue. However, checks won’t disappear overnight and likely won’t decline much at all among some consumers without significant intervention.
This document provides findings from research into consumer behavior and attitudes regarding mobile deposit services from large financial institutions. Some key findings include:
- Mobile deposit adoption has grown rapidly, with 40% of existing users adopting in the past year. It is becoming a mainstream banking capability.
- Myths that paper checks are only used by older generations and millennials don't use them are busted, as all age groups receive a similar number of checks monthly.
- Ease of use, faster access to funds, and assurances that checks were deposited successfully and securely are top motivators for using mobile deposit more.
11.management of savings and credit cooperatives from the perspective of outr...Alexander Decker
This document summarizes a research study on the management of savings and credit cooperatives (SACCOs) in Southern Tigrai, Ethiopia from 2007 to 2010. The study assessed the growth and performance of 10 SACCOs in terms of outreach to members and financial sustainability. Key findings include:
1) Membership in the SACCOs increased over the study period, with an average growth rate of 25.08% from 2007 to 2010. Total membership across the 10 SACCOs rose from 860 in 2007 to 1,037 in 2010.
2) Total deposits and credits disbursed by the SACCOs also increased substantially over the study period, with average annual
Management of savings and credit cooperatives from the perspective of outreac...Alexander Decker
This document summarizes a research study on the management of Savings and Credit Cooperatives (SACCOs) in Southern Tigrai, Ethiopia from the perspectives of outreach and sustainability. The study analyzed data from SACCO members and documentation to examine relationships between growth measures like membership, loan portfolio size, and financial performance indicators. It found a positive correlation between asset utilization and financial performance, as well as between operational efficiency and asset size. However, operational efficiency was negatively correlated with financial performance. Factors like lack of awareness, weak governance, policy issues, and competition negatively impacted outreach and sustainability. The study concluded rural SACCOs can effectively link urban liquidity to rural credit needs if well-managed for
1) The document discusses opportunities and challenges for banks operating in emerging markets, focusing on 10 rapid-growth markets identified as the next wave beyond the BRICs.
2) Banks in these markets face common challenges around serving unbanked customers without developed infrastructure and meeting growing demand for lending with constrained balance sheets.
3) To achieve profitable growth, banks must balance rapid expansion with efficiency gains, through initiatives like low-cost retail products, strong corporate and investment banking capabilities, advisory services, and new wealth management products.
VOZ EXCLUSIVA FM EMISORA DEDICADA AL IMPULSO DE LA CULTURA REGIONAL, NACIONAL E INTERNACIONAL;NUESTRA AUTENTICIDAD HACE DE NOSOTROS UN ESTANDARTE, QUE LE APORTA A LA SOCIEDAD VALORES, ENTRETENIMIENTO Y VARIEDAD MUSICAL. ESCÚCHENOS EN : www.funiseh.com.co
Este documento resume la teoría de las inteligencias múltiples propuesta por Howard Gardner, la cual sostiene que la inteligencia no es un elemento unitario sino múltiple e independiente. Describe ocho tipos de inteligencia: lingüística, lógico-matemática, espacial, corporal-cinestésica, musical, interpersonal, intrapersonal y naturalista.
El documento describe la presentación clínica, estructura y factores de virulencia de Streptococcus pyogenes, así como las patologías asociadas como faringitis, erisipela, celulitis y fascitis necrotizante. También discute otros agentes etiológicos de infecciones del tracto respiratorio superior e inferior como neumonía y sinusitis, así como su diagnóstico y tratamiento.
El poema "Siempre nocturno" de Ana Rossetti describe una noche de insomnio en la que la ginebra provoca visiones y deseos mientras suena una música agotadora. Al amanecer solo queda sangre delgada y la despedida. Ana Rossetti es una poeta italo-española conocida por su obra poética que combina erotismo, esteticismo y culturalismo, aunque también ha escrito teatro, una ópera y narrativa. Se la considera una de las mejores poetas de la poesía española contemporá
El documento presenta una introducción al estado de la investigación sobre glaucoma, incluyendo una línea cronológica de quiénes han trabajado en la temática, fuentes primarias y secundarias relevantes, e información sobre realizar buenas búsquedas en inglés, español y francés. También proporciona un ejemplo de tabla sobre un estudio de 2009 que encontró que latanoprost redujo las concentraciones de TGF-B1 en pacientes con glaucoma secundario.
Bacterio F. Pseudomonadaceae - Fund. BarcelóDaniel Borba
Este documento describe las características de varias bacterias Gram negativas no fermentadoras de glucosa como Pseudomonas aeruginosa, Acinetobacter spp., Stenotrophomonas maltophilia y Legionella pneumophila. Detalla sus propiedades microbiológicas, mecanismos de patogenicidad, resistencia a antibióticos, manifestaciones clínicas e implicaciones en infecciones hospitalarias.
The document discusses customer segmentation analysis conducted in several countries as part of the Making Access Possible (MAP) program. Six common customer segments were identified: salaried workers, farmers, self-employed individuals, irregular earners, dependants, and migrants. Each segment has distinct demographic characteristics, income levels, occupations, and financial needs. Understanding these differences is important for developing targeted policies, products, and services to better promote financial inclusion among various groups. The segmentation approach provides insights to help tailor solutions to the unique needs and realities of each customer segment.
Cash remains the dominant payment instrument across the six MAP pilot countries despite the availability and promotion of digital payments. Local payments, which include most day-to-day purchases, are almost exclusively made with cash even among banked urban consumers. While digital payments are gaining ground for some payment needs like remittances and bill payments, over 95% of total payments are still made with cash on average across the countries. Barriers to migrating more payments to digital include a lack of ubiquitous digital payment infrastructure and the high costs associated with converting between cash and digital formats.
This document discusses innovative models for expanding financial access and inclusion around the world. It notes that over 50 countries have set targets for increasing access and mentions examples like Alibaba in China and M-Pesa in Kenya that focus on small business finance and mobile payments. The World Bank President has stated the goal of achieving universal financial access by 2020 using new technologies and business models. The initial point of access for many is receiving wages or payments electronically through means like mobile wallets or bank accounts. Expanding access to regulated bank accounts is an important next step towards full financial inclusion and its benefits.
This document discusses innovative models for expanding financial access and inclusion around the world. It notes that over 50 countries have set targets for increasing access and mentions examples like Alibaba in China and M-Pesa and Equity Bank in Kenya. World Bank President Jim Yong Kim has stated that universal financial access could be achievable by 2020 thanks to new technologies and business models. The initial point of access for many is receiving wages or payments electronically. Expanding access to bank accounts is an important next step towards full financial inclusion.
The document discusses innovative models that are expanding financial access through transformational business models like Alibaba in China and M-Pesa in Kenya. It also discusses the World Bank's goal of achieving universal financial access by 2020 through new technologies and business models. However, it notes that simply improving access to financial services is only a first step, and that bank accounts are important for full financial inclusion and access to savings, credit, and insurance. It discusses lessons from pilots on making low-income bank accounts viable and sustainable for banks through simplified products, alternative access points, and affordable pricing. Private sector buy-in is seen as key to achieving financial inclusion targets.
The document discusses innovative models that are expanding financial access through transformational business models like Alibaba in China and M-Pesa in Kenya. It also discusses the World Bank's goal of achieving universal financial access by 2020 through new technologies and business models. However, it notes that simply improving access to financial services is only a first step, and that savings accounts are important for reaching financial inclusion and reducing poverty through access to savings, credit, and insurance. It also discusses the need to design affordable products and engage the private sector to ensure targets for financial inclusion are achieved.
The first Engagement Banking Masterclass report in our Insight Series explores strategies aimed at fostering meaningful customer engagement across digital channels.
A new study on development organizations’ use of Mobile Money Bulk Payment Products carried out by NetHope. The report, based on qualitative and quantitative research, highlights a desire to move away from cash; usage of mobile money bulk payments; preferences and recommendations for design features of the products; and the estimated volume and value of this market segment.
The document summarizes a report by Mapa Insight Series on building mobile personal financial management (PFM) with mass market appeal. It highlights key developments by banks and vendors in the mobile PFM space over the last year. The report methodology included analyzing mobile banking functionality from over 200 live bank accounts and research on traditional and non-bank players. It provides insights on trends in the market and vendor perspectives to help with strategic planning.
The document discusses the future of microfinance in India. It notes that microfinance has expanded rapidly in recent years, with membership in associations growing and loan amounts outstanding increasing significantly from 2001-2004 and 2001-2005 for various microfinance programs and institutions. It also discusses the growing partnership models between banks and MFIs, and innovations in how banks provide funding to MFIs. Going forward, it emphasizes the need for greater financial literacy, product differentiation, and ensuring client empowerment through education on loan terms and conditions.
This document provides an overview and summary of the Mapa Insight Series report "Bank Disruption: Assessing the disruptive threat in retail banking".
The report analyzes disruptive threats to traditional retail banks from new fintech entrants. It identifies pain points for banks, assesses threats in areas like currency exchange, digital-only banking and personal investment/lending. The report also examines how some banks are responding through partnerships and new digital initiatives.
The document includes the report structure, objectives to identify examples of disruptive propositions and assess threats to banks, and the methodology of selecting disruptors and examples based on research of fintech startups. It provides sample pages analyzing specific disruptors like Revol
Financial inclusion lessons from SASSA and Net1 Jessica Robey
This presentation delivered by Illana Melzer at the Foresight 2017 conference in May 2017 looks at the research we have conducted on this topic in a bit more detail and drives home some important messages for the financial services sector (both regulators and product providers)
This document summarizes a breakfast club event hosted by Initio Luxembourg on the topic of open banking. The event included presentations from several speakers on topics such as how open banking challenges traditional bank business models through disintermediation, the need for banks to focus on their core assets and legitimacy rather than solely on customers, and the LuxHub marketplace which enables fintechs and banks to connect through APIs. The document provides an overview of the key discussions and viewpoints shared at the event regarding open banking, innovation, and the evolving roles of banks and other players in the financial industry.
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Financial literacy in China as an innovation opportunityJan Brejcha
The purpose of the study was to get insights of the financial knowledge, behavior, and attitudes of the young generation of Chinese (Millenials or Little Emperors, i.e. born between 1980-1995), in order to find and exploit design opportunities to improve the financial well being of our target group. Our paper presents an introduction to the research area, the current technological trends, the results of our initial study, and further directions both for research and design of solutions targeted at our tentative users.
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This document is a project report submitted to Punjab Technical University by Aijaz Ahmed Rather for the partial fulfillment of an MBA degree. The report examines the role of nationalized banks in promoting microfinance services among rural people in Punjab, India. It includes an acknowledgement, executive summary, table of contents, and suggested chapter plan. The project report analyzes microfinance in India, issues for commercial banks, the research methodology used, and will provide conclusions, limitations, recommendations, and suggestions.
First, the document introduces the $380 billion opportunity for banks in developing economies to profitably serve underbanked individuals and micro-enterprises through financial inclusion. Second, it describes how digital technology and economic growth are enabling new forms of accessible and low-cost financial services, while competitors are also moving to capture this market. Third, the document outlines six key insights from a study of 30 banks on developing strategies and capabilities for financial inclusion, such as starting with payments and savings, using savings groups, and balancing physical and digital channels.
1. Lost in the mail
Why bank account access is not translating into usage
MAP GLOBAL INSIGHTS SERIES:
NOTE 4 | 2016
2. 2
About the cover
The cover contrasts an orderly-looking queue into a bank with a representation
of the more challenging, convoluted and ‘dispersed’ nature of the financial lives of
consumers in the MAP pilot countries. Widely considered an answer to financial
inclusion, bank account ownership is not, in reality, translating into meaningful
usage; it is often actively eroding account holders’ income. Time away from work,
travelling and queues are among the inconveniences endured by consumers in
order to access their accounts, which they treat simply as ‘mailboxes’: repositories
of funds that are withdrawn almost in their entirety as soon as they are deposited
and used to meet the varied financial obligations of the consumer’s ‘real world’.
The bulk of the typical account holder’s financial payments life is lived outside of
their bank account, with value for all stakeholders being lost in the process.
Lost in the mail
Why bank account access is not translating into usage
MAP GLOBAL INSIGHTS SERIES:
NOTE 4 | 2016
About the Making Access Possible Programme
Making Access Possible (MAP) is a multi-country initiative
to support financial inclusion through a process of evidence-
based analysis feeding into a financial inclusion roadmap
jointly implemented by a range of local stakeholders.
MAP was initiated by the United Nations Capital Development
Fund (UNCDF) and is implemented in partnership with FinMark
Trust and the Centre for Financial Regulation and Inclusion
(Cenfri). In each country, MAP brings together a broad range
of stakeholders from within government, the private sector
and the donor community to create a set of practical actions
aimed at extending financial inclusion tailored to that country.
Acknowledgements
Series authors: Hennie Bester, Jeremy Gray, Christine
Hougaard, David Saunders and Albert van der Linden
Series editor: Kameshnee Naidoo
Editing and proofreading: Jacquie Withers
Design and layout: Garage East
The authors of this note would like to thank the following
UNCDF team that reviewed the document and provided
invaluable comments: Samuel Choritz, Henri Dommel,
Pamela Eser, Anthony Githiari, Nomathemba Mhlanga
and Hanadi Tutunji.
This series has been made possible
through the support of the Swedish
International Development Agency
and the Government of the Grand
Duchy of Luxembourg.
3. Lost in the mail
1
The MAP Global Insights series
The MAP Global Insights series consolidates and synthesises the learnings from MAP
across the MAP pilot countries. The first of the MAP Global Insights products comprises
five thematic cross-country notes plus a concluding note, based on the initial round of
findings from the country diagnostic studies, which have been conducted in Thailand,
Myanmar, Swaziland, Mozambique, Lesotho and Malawi.
Mapping
the DNA
MAP GLOBAL INSIGHTS SERIES:
NOTE 6 | 2016
Using consumer insights to unlock
the potential of financial inclusion
Decoding the customer
MAP GLOBAL INSIGHTS SERIES:
NOTE 1 | 2015
First impressions from a more granular
approach to client typology
Shifting measurement away
from a one-dimensional view of
financial inclusion
Depth sounding
MAP GLOBAL INSIGHTS SERIES:
NOTE 2 | 2016
Lost in the mail
Why bank account access is not translating into usage
MAP GLOBAL INSIGHTS SERIES:
NOTE 4 | 2016
Shifting measurement away
from a one-dimensional view of
financial inclusion
Depth sounding
MAP GLOBAL INSIGHTS SERIES:
NOTE 2 | 2016
Shifting measurement away
from a one-dimensional view of
financial inclusion
Depth sounding
MAP GLOBAL INSIGHTS SERIES:
NOTE 2 | 2016
Lost in the mail
Why bank account access is not translating into usage
MAP GLOBAL INSIGHTS SERIES:
NOTE 4 | 2016
‘Homefield advantage’
Learning from the popularity of local financial services providers
MAP GLOBAL INSIGHTS SERIES:
NOTE 3 | 2016
The king is
(not) dead
Why digital payments are not
replacing cash
MAP GLOBAL INSIGHTS SERIES:
NOTE 5 | 2016
Note 4 considers the gap between ownership and usage of bank
accounts. The note queries whether bank accounts are always the
appropriate product for increasing customer welfare, and argues the
need for a paradigm shift away from focusing on ownership to a focus on
usage in the context of a wider, systems approach.
Note 1 unpacks the target market segmentation approach that is
central to the MAP methodology of putting the client at the core of the
analysis. Note 1 provides a window into the emerging cross-country
segments, and the implications for providers, policymakers and donors
in this regard.
Note 2 explores the shift in financial inclusion measurement away
from focusing solely on access to more closely match the realities of how
adults live their financial lives and explores the policy implications of
moving away from a linear, one-dimensional view of financial inclusion.
Note 3 looks at the nature of informal financial services. It shows
that it is the local nature of these financial services, rather than
their informal nature, that makes them valuable for the majority of
consumers in these countries.
Note 5 focuses on cash as a payment instrument to explore the largely
undiminished popularity of cash. The different payment needs of
consumers are introduced, analysed and compared with regard to the
use of cash versus digital instruments.
Note 6 draws together the findings from this Global Insights series. It
shows that the MAP evidence calls for a rethink of conventional financial
inclusion assumptions, based on a consumer decision-making framework
that emphasises economic incentives, cost and value.
4. MAP Global Insights Note 4
2
Underlying the global financial inclusion agenda is the
assumption that providing access to and ownership of
bank accounts will improve the lives of previously excluded
adults (GPFI 2016) and contribute to economic growth
objectives. This assumption is reinforced by global surveys
such as the World Bank Global Financial Inclusion Index
(Findex) and the country-level FinScope Consumer Survey,
which monitor the progress of financial inclusion policies by
tracking the number of ‘banked’ individuals. The headline
indicators, such as the FinScope Access Strand, position
bank account ownership as the priority area of inclusion,
with other forms of financial inclusion secondary.
However, the evidence from the first six MAP pilot
countries shows that ownership of a bank account is not a
sufficient measure for whether adults are using them and,
in turn, benefiting from them.
Why bank accounts may not always
be the answer to improving consumer well-being
If people own bank accounts, but do not use them, or
withdraw all their cash at once, as Fatima does, the
chances are very likely that they are not benefiting much
from them; they are typically paying fees for these unused
services, which in all likelihood is eroding their income.
Furthermore, to withdraw their cash they must incur
additional costs, such as for travel or opportunity costs
from not working. There are exceptions, of course: some
account holders voluntarily hold and pay for such ‘mailbox’
accounts, seeming to find the minimal benefit derived
from them sufficient to meet their specific needs, and
possibly preferring to use other types of channels to meet
the balance of their financial needs. Nevertheless, while
accounts used as mailboxes might or might not offer their
owners benefits, they add only limited value – certainly less
than their potential, and certainly less than what donors
and policymakers should be aiming for.
Note 4 zeroes in on what it means to use a financial
product – in this case, a bank account. The note scrutinises
how bank accounts are being used, analyses why they are
being used this way, and asks why banks accounts are not
used more. The note also makes suggestions for why banks
are not really responding. Furthermore, the note examines
how the way in which bank accounts are being used by
consumers in the MAP pilot countries in many cases leads
to consumers being worse off financially. It then considers
why policymakers, providers and donors should be very
concerned about this situation, and suggests possible
options under the circumstances.
To sum up, given that financial inclusion is about improving
consumer welfare, Note 4 poses two related questions: Is
it possible that – contrary to the prevailing emphasis – bank
accounts are not the answer, especially when the financial
infrastructure required to enable active usage of those
accounts, at affordable cost, does not exist? And if this is
so, where might the answer/s lie?
Fatima Cugala is a teacher working at a school a few
hours by bus north of Maputo, Mozambique. For most
of her working career, Fatima received her salary
in cash at the school, but in 2011 the government
introduced an initiative to pay salaries directly into
bank accounts and opened accounts for all teachers
on their payroll. A few days before payday Fatima
now takes leave from school to make the bus trip to
the northernmost part of Maputo to the bank branch
where she is a customer. When she arrives at the bank
she waits in a long queue, and by the time she gets
to the ATM, typically the system is down. Usually
she must wait until the next day to try again. On the
next day if she arrives at the ATM early she is usually
able to withdraw her money. She then starts the trip
home where she plans to save the cash that she has
withdrawn in the community xitique (an informal
savings group). Fatima repeats the same trip every
month, receiving one deposit into her account and
making one withdrawal to access her income. The time
away from school means that valuable tuition time is
lost. While Fatima is now considered a ‘banked’ adult,
and thus ‘financially included’, the additional costs
incurred to use her bank account outweigh the value
she derives from it and she uses it only when she must.
5. Lost in the mail
3
Defining usage
Ownership is the step between access and usage
and, along with access, is most commonly measured
in financial inclusion:
• Access is when financial services are available for
adults to take up. Density of bank-based distribution
or distance to touchpoints are indicators typically
used to measure this.
• Ownership is when the adult actually takes up the
product (and therefore owns it) and enters into a
relationship with a financial services provider that
confers on the person the right to use the financial
service without any further requirement being met.
The percentage of adults with a transaction, deposit
or credit account from a bank or financial institution
is typically used to measure this.
• Usage is when adults actually use the financial
service they own for a specific purpose: for example,
to transact, to store value and/or to access credit.
This is not typically measured in financial inclusion.
However, it is critical to measure, including intensity
of usage, because it is where adults derive value from
the financial service.
Usage in this note moves away from the AFI Financial
Inclusion Data Working Group definition that has
been used in previous notes by differentiating between
ownership and usage.
Why usage?
Consumers can use bank accounts in the
following ways:
• Transfer of value – to transact. People can
use their bank accounts to make or receive a
transfer of value, to pay for goods and services
and to make payments. In terms of digital
payments, the most commonly used are card based,
but digital payments also include Internet banking and
mobile platforms that act as the front-end for banks.
• Liquidity, meeting goals and financial
resilience – to save. People can also use
their accounts to store value. This means
that there is no return on their savings, but
the account provides them with a safe and reliable
place in which to keep their money. Where there is
a real return on savings, bank accounts can also be
used as investments.
• Liquidity and resilience – to access
credit. People may want to use their
accounts to access credit. This includes
using the bank account to make
repayments, or as an instrument to access credit
directly from the bank.
The purpose of this note is not to demonstrate how
bank account usage translates into economic value.
Rather, in the first instance the note sets out to
provide an in-depth look at and understanding of
the extent to which consumers in the six MAP pilot
countries are using bank accounts to meet their
financial needs as envisaged above. This is of interest
to policymakers and financial services providers for at
least the following reasons:
• For policymakers, usage is important for achieving
broader public policy objectives, such as financial
intermediation. When adults use bank accounts to
save or to store value they grow the available pool
of capital for financial intermediation. This is an
important way in which credit can be reticulated to
the productive sector as well as to grow savings for
national investment.
• For providers, usage is important for the viability
of their business models. Providers incur costs
when they acquire customers, and such costs are
recouped by fees charged to customers and interest
from lending out customer deposits. These costs all
rely on account holders using the accounts. The less
that accounts are used, the less revenue is earned
by banks, thus limiting the potential for further
investment driving market innovation.
Thus, in the second instance, this note looks at what
happens when bank accounts are not used, or are
used in a very limited capacity: value is lost for all
stakeholders. Consumers own bank accounts from
which they get little – often no – value and that may
in all likelihood be eroding value; policymakers’
efforts to achieve their policy objectives are
undermined; and providers are not able to viably
extend access into new markets. If this is the case,
then policymakers and donors pursuing financial
inclusion objectives should carefully consider the
circumstances where a focus on increasing access
to bank accounts is appropriate. Based on the MAP
research findings, this note argues that focusing
on increasing access to bank accounts is rarely an
appropriate financial inclusion strategy - and that
the focus needs to be on a wider, systems approach
to identifying and fulfilling preconditions for active
account usage.
6. MAP Global Insights Note 4
4
In the third instance, the note touches on the
importance once again of policymakers and donors
being guided in their policy-making and initiatives by
consumer behaviour – that is to say, by actual usage
choices and patterns. This echoes points raised in the
other notes: that the poor in fact have considerable
skills in managing their financial lives, and that
ostensibly counter-intuitive practices often make sense
for a range of reasons that are not immediately apparent
from the outside and hence do not immediately link
into prevailing policy and business practices.
In the final instance, the note includes a social
justice emphasis, in that in reality an unintended
consequence of current financial inclusion policy
and initiatives is that bank account ownership
and existing conditions of usage are in many cases
disadvantaging already-disadvantaged consumers,
leaving them worse off.
What are we finding? Access not
translating into usage
Rising access paints a misleadingly rosy picture. The
Findex Global Survey (2014) found that from 2011–14
the percentage of adults globally that reported owning
an account at a financial institution (excluding those
that only report owning a mobile money account) grew
from 51% to 56%. The FinScope Consumer Survey
corroborates this trend in MAP countries where
multiple surveys have been conducted:
• In Malawi, the percentage of banked adults
grew from 20% of the adult population in 2008
to 27% in 2014.
• In Mozambique, it grew from 12% in 2009
to 20% in 2014.
• In Swaziland, it grew from 44% in 2011
to 54% in 2014.
The MAP research shows very clearly that access,
measured as ownership of bank accounts, is not
necessarily translating into usage; despite the large
gains in ownership or access, usage is not keeping up.
Not only is bank account dormancy very common but,
perhaps more importantly, where bank accounts are
used, they are used primarily as a ‘mailbox’ account –
where ‘negative value’ is actually created. The story of
Fatima Cugala, cited at the outset, is a recurring theme.
Government and donors drive account roll-out. The
rapid increase in account ownership has often been
driven by an emphasis on bank-led financial inclusion.
Targeted interventions have included mandating that
government payments – whether for salaries, grants
or pensions – be paid into bank accounts, as well as
incentivising or legally requiring banks to offer low-
cost or entry-level accounts:
• In Mozambique, 76% of government employees are
paid electronically into an account, compared to
41% of non-government salaried workers
(FinScope 2014).
• In Malawi, it is estimated that 79% of donor welfare
payments are made into accounts or electronic
instruments (BTCA 2015).
• In Swaziland and Lesotho, all banks offer a low-cost
or entry-level bank account (MAP Lesotho 2014;
MAP Swaziland 2014).
Thus bank account ownership has increased even
among lower-income groups in these countries.
How are account holders using
bank accounts?
Are customers using bank accounts
to transact?
Figure 1 presents data from the Findex Global Survey
on the frequency of transactions for bank accounts
in five MAP pilot countries. The usage profile is
disaggregated into the following three categories:
• A dormant account is an account
where the client has not reported
making any deposits or withdrawals
in a typical month. This indicator
is taken to mean that the person who owns the
account maintains the account, but does not use it to
transact or for any other purpose.
• A mailbox account is an account where
an account holder reports making only
one or two deposits or withdrawals in a
typical month. This indicator is taken to
mean that the account holder uses the account only to
receive income and, once that is received, the person
tends to withdraw the full amount in cash.
• A used account is an account where
the account holder reports making three
or more withdrawals or deposits in a
typical month. This is taken to mean
that the account holder makes multiple transactions
throughout the course of a single month.
7. Lost in the mail
5
ThailandLesothoSwaziland Malawi Myanmar
2%
56%
42%
5%
56%
39%
6%
67%
27%
8%
71%
21%
76%
21%
3%100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
%ofadultpopulation
Dormant
Mailbox
Used
Figure 1: Bank account usage across five of the MAP pilot countries
Source: Malawi, Myanmar, Thailand: Findex 2014; Lesotho, Swaziland: Findex 2011.
Dormant accounts present. Bearing in mind the
phenomenon of account holders’ tendency to under-
report bank account dormancy because they are
not always aware of accounts they have and are
not using, we see that Figure 1 shows that in most
of the MAP pilot countries there is a relatively low
presence of dormant accounts. The exceptions are
Myanmar and Mozambique (the latter is not shown
in the figure). While Findex data is not available
for Mozambique, supply-side consultation with the
industry revealed high levels of inactive accounts;
one bank reported that approximately 25% of its
deposit accounts were inactive, while another
indicated that approximately 33% of its current
accounts were inactive.
Many use accounts only as a mailbox. Figure 1
indicates that the majority of adults that own a bank
account – between half and two-thirds of bank
account owners – use their bank accounts as mailbox
accounts, making one – at maximum two – deposits
per month, followed by one – at maximum two – cash
withdrawals. As explained, a mailbox account is thus
primarily a holder for electronic value that is often
immediately, and virtually in its entirety, converted
into cash (a process termed ‘encashment’).
MAP confirms the mailbox nature of the bulk of bank
accounts in the countries studied:
• In Mozambique, on average, only two ATM
withdrawals are made per card per month (data
supplied by Central Bank of Mozambique – BDM
2014), indicating that very few cardholders use
their cards for anything other than a single, large
ATM withdrawal weekly or monthly.
• In Lesotho, ATM withdrawals account for the
majority of transactions in terms of both volume
(89% of the total) and value (62%) (data supplied
by Central Bank of Lesotho 2013). Furthermore,
FinScope (2011) indicated that just 5% of bank
account holders had transferred money to
someone else’s account within the previous three
months. In contrast, 85% of bank account holders
indicated that they had withdrawn cash within
the same period. This suggests that most account
holders use their accounts primarily for ATM
withdrawals. Anecdotal evidence suggests that
many account holders immediately withdraw
their entire salary from the account when the
salary is deposited.
Account holders' exposure to the bank is
minimal. In the absence of other electronic
payment channels, a bank account used as a
mailbox will often be the only way in which a
person can receive a remittance or other payment
over distance. For such customers, the benefit
may or may not outweigh the cost of maintaining
and accessing the account, but what is very clear
in such cases is that the bulk of the bank account
holder’s financial payments life is lived outside of
the bank account.
8. MAP Global Insights Note 4
6
Are customers using bank accounts
to store value or to save?
Limited store of value. While the available data in
Findex tracks the frequency of transactions, data
from MAP can be used to show whether an account
is used to store value or save. Figure 2 compares
the percentage of adults that report owning a bank
account and saving in it with the percentage of adults
that report owning a bank account but not saving in
it. It shows that, with the exception of Swaziland and
Myanmar, the majority of bank account holders do not
use their bank accounts for savings. Account holders
that do not use their account to store value use it to
move cash by making or receiving payments, or as a
mailbox account as described above. For example:
• In Thailand, bank account ownership is driven
largely by the ability to use bank accounts as a
means of receiving and sending funds across the
country rather than as a tool for accumulating or
storing cash. This was confirmed by FinScope,
which found that five of the seven top reasons that
adults reported for owning bank accounts was
related to the sending or receiving of remittances.
Are customers using bank accounts
to access credit?
Few able to access credit through banks. Across the
six MAP pilot countries, very few people with a bank
account also report accessing credit from the bank.
Figure 3 shows that the majority of banked adults that
use credit access it from sources other than the bank.
The exceptions in this regard are Mozambique
and Myanmar:
• In Mozambique, the relatively high percentage of
adults with bank accounts that use them to access
credit is driven by payroll lending to government
workers: 41% of government workers access credit
through their bank accounts, followed by 11% of
salaried workers and 6% of micro-enterprises.
Take-up of bank credit by all other groups is
marginal, at 2% or less.
• The high usage of credit through a bank account
in Myanmar is driven by state provision to farmers
through the Myanmar Agricultural Development
Bank (MADB). In this instance, the government
subsidises both the cost of the credit and the cost
of reticulating the cash to distribute it. This drives
high usage of credit among farmers compared to
other target markets and is also a significant driver
of bank account take-up in Myanmar.
Limited account usage outside of encashment.
To sum up, the above analysis shows that, in the six
MAP pilot countries, bank accounts are primarily
used as mailboxes to receive income in cash. Outside
of the traditional high-income banked market,
banks accounts are not used for payments, very
few people use them to save or store value, and
even fewer people access credit through their bank
accounts. The dominant use for bank accounts is for
encashment purposes – to turn a salary, grant receipt
or remittance into cash as soon as it is received.
Why are bank accounts not used more?
The MAP evidence presented in this note highlights
that while financial inclusion initiatives are
translating into more bank accounts, usage of
these bank accounts remains limited. This section
focuses on the customer perspective to unpack why
people are not actively using their accounts. The
MAP evidence suggests two key drivers for this
phenomenon: 1. Actually accessing and using the
bank account is costly; and 2. Bank accounts are not
meeting customers’ need.
1. Actually accessing and using the bank
account is costly
Cash infrastructure is lacking. Across the six MAP
countries more than 90% of payments happen in
cash (as noted in Notes 3 and 5). It is the primary
means of economic and financial activity. Thus
bank infrastructure that allows access to cash (such
as branches and ATMs) is critical if people are to
function in their current financial and economic
lives. However, cash infrastructure offered by banks
is limited in these countries. Figure 4 shows that,
with the exception of Thailand, between about
20% and 50% of bank clients in the MAP pilot
countries report living more than an hour away
from banking infrastructure.
It is costly to access cash infrastructure. While
the basic cost of bank accounts may be low, MAP
finds that the overall usage cost is high. This was
highlighted in the example, cited at the outset, of
Fatima Cugala, who had to incur significant transport
and opportunity costs in order to use her bank
account. In her home country, Mozambique, 47%
of all bank branches, 45% of ATMs and 60% of POS
devices are concentrated in Maputo City and Maputo
Province. Where infrastructure is present outside
of these regions, it is concentrated in urban areas.
Consumer focus-group discussions revealed that this
is a common deterrent to using bank accounts.
9. Lost in the mail
7
Mozambique LesothoMalawiMyanmarSwazilandThailand
76%
4%
20%
25%
5%
70%
7%
33%
60%
5%
41%
54%
5%
35%
60%
3%
33%
64%
52%
18%
30%
63%
5%
32%
61%
19%
20%
41%
30%
29%
57%
31%
12%
24%
30%
47%
Malawi
Malawi
Thailand
Thailand
Swaziland
Swaziland
Myanmar
Myanmar
Mozambique
Mozambique
Lesotho
Lesotho
59%
41%
54%
46%
44%
56%
43%
57%
35%
65%
35%
65%
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
%ofadultsthatownabankaccount%ofadultsthatownabankaccount
Adults that own a
bank account and
report saving in it
Adults that own a
bank account but
do not report
saving in it
% of bank clients that report using
credit through their bank account
% of bank clients that report using
credit from other sources
% of bank clients that do not
report using credit
1 hour or more 30 minutes to 1 hour less than 30 minutes
Figure 2: Percentage that report owning a bank account and saving
in it vs those that report owning a bank account but not saving in it
Source: FinScope Consumer Surveys.
Figure 3: Percentage of banked adults that access credit from a bank vs other sources
Source: FinScope Consumer Surveys.
Figure 4: Time to touchpoint for adults with bank accounts
Source: FinScope Consumer Surveys.
10. MAP Global Insights Note 4
8 8
‘It became complicated with BIM [bank]. If I make a
profit, I go to BIM and make a deposit, but BIM is located
in town and I use my profit money as fare to get to town.’
(Inhambane, Mozambique, female, aged 20–30)
Further evidence of the high cost of usage was found
in Malawi. Most Malawians live in rural areas far
from bank infrastructure. While average bank fees
are not unaffordable for the majority of the adult
population, the average transportation cost to reach
the closest bank is hefty. Furthermore, the time
spent travelling and the long queues add a substantial
opportunity cost for adults reliant on their own labour
for their income. As Note 3 graphically shows, by the
time these additional costs are taken into account, the
total cost of using a bank account is more than seven
times the bank fees.
Available infrastructure not effective. Furthermore,
even when it is present, infrastructure may be
unusable or overextended:
• In Malawi, limited bank interoperability means that
consumers are only able to use their own bank’s
infrastructure, further limiting their options.
• In Mozambique, ATMs are rare, and where they are
present they are often unreliable. ATMs experience
frequent network outages and are prone to running
out of cash in some areas.
The pressure on the existing ATM network in
Mozambique is illustrated by estimating the impact
created if all current consumers simply made two
withdrawals per month. According to the MAP
calculations, the likely impact would be that each
ATM would need to increase operational times
to up to 25 hours a day – clearly impossible. MAP
Mozambique (2015) found that the current fleet of
1,300 ATMs would need to more than triple in order
to accommodate any consumer behaviour beyond a
single cash withdrawal per month.
Inaccessible or unreliable infrastructure creates a
major inconvenience for those required to access
their income from bank accounts. If, in response,
bank account holders withdraw all their funds
whenever the ATMs are operating, this entrenches
mailbox behaviour.
2. Bank accounts are not meeting
customers’ need
Consumers with limited or tight incomes need
financial services from providers that can help them
meet a broad range of financial needs. The findings
from the first six MAP pilot countries are that bank
accounts at best meet a narrow set of people’s needs,
and at worst do not meet any needs at all.
Bank accounts not being used to transact. One of
the primary functions of a bank account is its use
for account holder transacting. However, as already
described in the section on how holders use their
accounts, the majority do not use their bank accounts
to transact, preferring to withdraw their income in
cash and use that to live their financial lives.
Evidence from MAP identified two key drivers of
why account holders do not use their bank accounts
to transact:
There is a preference for cash. Across the MAP
countries the majority of adults live their financial
lives in cash and therefore have a preference
for using cash to transact. Cash offers greater
flexibility for consumers as they always have
immediate access to their money. Furthermore,
the cost of using cash after you withdraw it is very
low. (The only factor that increases the cost of cash
post-withdrawal in countries tends to be crime –
e.g. using a safe to store the cash.)
• In Lesotho, 54% of adults prefer to carry cash
rather than bank cards (FinScope 2011).
• In Swaziland, 64% of adults believe that you
can easily live your life without a bank account
(FinScope 2011).
• In Malawi, just over 99% of all payment
transactions are made in cash (BTCA 2015).
• In Mozambique, 66% of adults transact
in cash exclusively (FinScope 2014).
• Even in Thailand (with better infrastructure for
cashless transactions), large payments such as
monthly rent or car payments are commonly made
using cash (FinScope 2013).
Digital payments infrastructure is limited. For adults
to use their bank accounts to transact, they require
basic cards that have transaction functionality
and payment infrastructure that can accept them.
However, payment infrastructure remains a major
challenge across the MAP countries. Figure 5 shows
that, with the exception of Thailand, infrastructure
required for cashless transactions, such as point
of sale (POS) devices, is severely inadequate when
compared to the average for OECD countries.
Furthermore, few bank clients have the card
functionality to use these POS devices. For example,
evidence from MAP is that:
11. Lost in the mail
9
Figure 5: POS devices per 100,000 adults
Source: MAP diagnostic reports.
• In Malawi, only 3% of bank clients have debit cards
and less than 1% have credit cards (FinScope 2014).
• In Swaziland, 13% of bank clients report
having a debit card and only 6% have a credit
card (FinScope 2011).
• Even in Thailand, debit and credit cards are not
ubiquitous among bank clients: only two-thirds
have debit cards and less than 7% have credit cards
(FinScope 2013).
Qualitative demand-side research has indicated that
the lack of digital payments infrastructure gives
consumers little choice but to continue using cash,
thus using bank accounts only for encashment.
‘The good thing about cash, here in the village, is
because we have small shops that wouldn’t accept
cheques or other payments, so it is better we use cash.’
(Malawi, male, aged 41, salaried employee)
The preference for cash and the lack of payment
infrastructure undermines the adoption of digital
transactions. The international yardstick for the level
of adoption of digital commerce in retail economies
is the ratio of POS transactions to ATM transactions.
Predominantly cash-based economies like India report
around 7 POS transactions per ATM withdrawal,
and the G20 countries around 16. The majority of
MAP countries fall well below the 7 POS transactions
benchmark. For example, in Mozambique the figure is
0.36, reflecting an overwhelming preference for cash
and very low adoption of digital services.
Bank accounts not being used as a store of
value. As already discussed, holders can use
bank accounts as a safe and reliable mechanism
to store value, which they can draw down to
smooth consumption when their cash runs short.
However, as also already indicated, the majority
do not do so.
While not exhaustive, evidence from MAP
revealed the following three key drivers of why
account holders do not use their accounts to
store value:
Pricing erodes value. The findings from the first
six MAP pilot countries are that the pricing
models for bank accounts act as a disincentive for
the majority of adults to use them. While pricing
models vary quite substantially, qualitative
research in all of the countries indicates that
bank account holders are strongly opposed
to monthly service fees because they erode
the value stored in the accounts. (This is also
mentioned in Note 3 as a reason for consumers’
preference for local financial services providers.)
‘I used to keep my money in a bank account. But
then when I went to withdraw it, there was less
than when I first deposited the money. I asked
them why and they told me about these charges,
but I didn’t understand why they took so much’
(Butha-Buthe, Lesotho, female, aged 33, police
officer and informal moneylender)
515
2 155
Malawi
Thailand
OECD
countries
Swaziland
Myanmar
Mozambique
Lesotho
2,500
2,000
1,500
1,000
500
0
No.ofPOSdevicesper100,000adults
1.9 9
34 52 52
12. MAP Global Insights Note 4
10
‘The bank charges are astronomical…And they fail to
explain this right from the beginning. You put your
money in and when you take it out you are shocked to
find that it’s less than what you expected.’
(Manzini, Swaziland, female, aged 41–55)
For example, Table 1 shows that in Swaziland the
pricing model of banks was found to erode nearly
half of the total nominal value for people saving E50
(US$4.70) a month for 12 months and nearly a quarter
of the total nominal value for those saving E100
(US$9.40). This is the best-case scenario, if the money
is left in the bank. The reality is that bank account
holders would incur additional costs from withdrawal
fees used to access their income, and reduced interest
because they would be leaving less money in their
account. While this would result in lower costs
incurred for monthly service fees, the client would
be left with less income at the end because of the
additional costs incurred from withdrawals and
lower revenue from reduced interest.
Banks cannot facilitate small-value savings. Bank
account holders with low income only have small
amounts to save. Transaction costs must therefore
be close to zero to make savings viable. However,
collecting small-value deposits is operationally
expensive outside of high-population areas. The result
is that very few banks across the MAP countries are
able to cost-effectively facilitate small-value savings
for the majority of consumers who live in rural areas.
(Note 3 explores this issue of local providers being
preferred by consumers for small-value savings, and
provides a breakdown of the monthly savings by
different types of providers.) This was confirmed by
FinScope, which found that across the six MAP pilot
countries those that reported saving at banks were
primarily higher-income earners, who saved relatively
larger sums than those saving with any other provider.
For example, in Malawi, the average monthly saving in
banks was US$220, compared to that in village savings
and loan associations (VSLAs), which was US$2. The
travel costs (as already highlighted) to make small-
value savings contributions render savings in formal
institutions unfeasible for most rural Malawians.
Focus-group discussions in Malawi revealed that in
many cases this was a conscious decision by the client.
Q: ‘Do you have a bank account?’
A: ‘I just opened it a year ago at ABC Bank with an
amount of K500 [US$1.20] but I do not use it either
for depositing or withdrawing any amount from it,
because of the distance from here to where the banks
are, so I cannot waste some money travelling to the
bank just to keep the money at the bank for while I
have a house where I can keep the money.’
(Malawi, male, aged 43, farmer)
This may be why adults in Malawi have a
preference for saving at home or in informal
(following Note 3: read ‘local’ for ‘informal’)
savings groups, as shown in Figure 6.
Entry-level bank savings account
(calculated on average weighted costs across the four
banks’ entry-level savings accounts, based on market
share of consumers)
Monthly deposit E50 (US$4.70) E100 (US$9.40)
Interest earned (pa) 1% 1%
Total deposits during the year E600.00 (US$56.7) E1,200.00 (US$113.4)
Less total annual deposit fees (one deposit each month) E183.51 (US$17.30) E189.96 (US$17.95)
Annual interest compounded monthly E2.26 (US$0.21) E5.49 (US$0.52)
Less total annual service fee (monthly charge x 12) E116.44 (US$11.00) E116.44 (US$11.00)
Less withdrawal fee (incurred when holder withdraws the
remaining value after the 12 months)
E4.67 (US$0.44) E10.73 (US$1.01)
Nominal value of savings at year end E297.64 (US$28.13) E888.36 (US$83.96)
Real value of savings at year end adjusted for inflation
(less 8.94%)
E271.03 (US$25.62) E808.94 (US$76.46)
Percentage of initial deposits left at the end of 12 months 45.2% 67.4%
Table 1: Estimated value of monthly savings in banks after 12 months of contributing E50 or E100
Source: Mystery shopping 2013; Supply-side consultations 2013.
13. Lost in the mail
11
%ofadultsthatreportsaving
17%
4%
12%
23%
Bank Other
formal
Informal Family and
friends
Figure 6: Total take-up of savings products in Malawi
Source: FinScope Malawi (2014).
Bank saving is neither disciplined nor flexible. As
shown in Note 3, the value of local (informal) savings
groups for many adults lies in their ability to offer
savings discipline mechanisms for their clients, while
still providing them with the flexibility to access funds
in the event of an emergency. Local savings groups,
such as VSLAs in Malawi and Lesotho, xitiques in
Mozambique or Sajjas in Thailand, require their
members to make regular, monthly contributions.
Through the group collective structure, members
are able to apply social pressure on other members
to ensure that they contribute and meet their savings
goals. While this pressure is crucial in order to
instil the discipline required to save over time, these
groups also support their members when they are in
trouble. For example, it was reported during multiple
fieldwork interviews that xitiques in Mozambique
will allow a member to take their turn in the rotating
scheme early if they are facing an emergency. Banks
are able to replicate neither the discipline these
groups offer nor the flexibility they afford in the event
of an emergency.
‘When I am in trouble, I can take an advance
[from the xitique].’
(Maputo, Mozambique, male, aged 30–40)
Bank accounts not being used as a gateway to credit. In
addition to a store of value, bank accounts theoretically
provide holders with access to credit when they require
it to assist them in managing their financial lives. For
example, if they want to invest in an asset or they need an
immediate sum of capital to respond to a risk event, they
will need credit. However, as already indicated, very few
adults with bank accounts access credit from banks.
Evidence from MAP identified two key drivers of
why bank account holders are unable to use credit
through banks:
The poor struggle with collateral. Only 15% of adults
across the MAP countries reported receiving
monthly salaries. However, formal payslips are a
universal requirement for accessing unsecured
credit from a bank. Even fewer adults across the
MAP countries have appropriate physical collateral
to secure a collateralised loan. Even in Thailand,
where the most developed retail credit market was
found, those working in the informal sector, without
regular payslips or financial records, experience
documentation requirements as an absolute barrier to
accessing formal credit.
‘You need to have a collateral for you to get a loan like
Limbe Leaf if you want to take a loan of half a hectare
[10,000 square metres], you pay K17,000 [US$35.43]
[collateral for half hectare] and if it is one hectare you
pay K34,000 [US$70.87].’
(Malawi, female, aged 39, farmer)
Interest rate ceilings limit credit provision to low-
income market. Interest rate caps were found to be
present across the MAP countries. Such ceilings
restrict providers’ ability to price credit for riskier
markets. Non-bank providers, such as MFIs, are often
exempt from these interest rate caps, while banks
are not. These exemptions allow MFIs to price in the
risk of non-performing loans as well as the cost of
distributing them to harder-to-reach clients. Banks
can neither price in the cost of the risk nor overcome
the poor infrastructure present in most markets,
making it unviable to serve the majority of their bank
clients with credit. For example:
• In Swaziland, banks have a client base of more than
230,000 adults, reaching into even the poorest target
markets (MAP Swaziland 2014). However, as shown
in Figure 7, only 9% of bank clients have credit with
the bank, and these are largely the higher-income
clients. The figure also shows that a larger number
of lower-income consumers have credit with savings
groups and informal moneylenders, at much higher
interest rates.
14. MAP Global Insights Note 4
12
Averageinterestratecharged
Average monthly income (US$)
450%
400%
350%
300%
250%
200%
150%
100%
50%
0%
19% interest
rate cap per
annum
+200%
difference
Banks
12%
Other
formal
Informal
moneylenders
360%
Savings groups
240% Only 9% (21,015
adults) of bank clients
currently have bank
credit (average
income > US$516)
0 100 200 300 400 500 600
8% - 24%
Size of bubble
=
# of client
accounts
Lowest cost of informal
credit 240% per annum
Figure 7: Credit market in Swaziland
Source: MAP Swaziland (2014).
Why are banks not responding?
Current market and regulatory conditions provide
little incentive for banks to change their operations
because the cost of driving usage is higher than the
additional revenue the majority of banks would be
able to recoup.
Traditional bank business models do not make
sense in the low-income market. Bank revenue
across the MAP countries is generated primarily
through either intermediation or fees. However, as it
stands, banks make money off neither intermediation
nor fees in the low-income market:
• Intermediation business model sputters to a halt.
Banks gather many small and some larger deposits
to lend out. However, the tendency of low-income
clients to leave little value in their accounts, and
their preference for withdrawing the bulk of their
receipts in one or two lump sums shortly after
deposit, derails the intermediation business model.
Furthermore, the cost of raising deposits in the
low-income space is high due to the infrastructure
required to facilitate low-cost savings. From an
intermediation point of view then, low-income
clients offer limited scope.
• Mismatch between cost of installing infrastructure
and the revenue banks are getting. Financial sector
infrastructure is costly. The average operational
costs of an ATM are substantial for banks. For
example, in Malawi, MAP discussions with
providers indicated that the monthly operational
costs can be in the region of US$1,000. This is
in addition to the cost of purchasing the ATM,
which is about US$26,500, with a further cost
of US$12,000 to deploy it. These costs can
15. Lost in the mail
13
be further driven up by the lack of physical
infrastructure, which requires banks to bear the
cost of connectivity, electricity and in some cases
road infrastructure. Banks need to recoup these
costs from the fees that they generate from clients.
However, the revenue from customers is too low to
justify the infrastructure investment.
In this regard, the exceptions among the MAP
countries are Swaziland and Lesotho, where financial
sector infrastructure is more widespread. Banks
charge high fees for monthly servicing, deposit and
withdrawal to justify their infrastructure investment.
MAP consultation with providers in Swaziland and
Lesotho revealed that between 40% and 60% of their
revenue is generated from bank charges (fees).
Need for new models. A traditional bricks-and-
mortar infrastructure is expensive and unlikely to
enhance the end service to the client. Furthermore,
the incentive to invest in bricks-and-mortar
infrastructure and the attendant salaries is not there,
given that the majority of the clients are very low net
worth. Operating models that are more cost effective
and responsive to the needs of the customer will
drive usage.
Donor programmes and government policies can
inhibit banks. The evidence from the MAP countries
underscores the complexity of the situation, indicating
that regulators and donors can inadvertently promote
policies and programmes that inhibit banks from
extending their offerings:
• Subsidising or restricting bank costs undermines
infrastructure investment. In many countries, donor
and government policy works directly against
infrastructure expansion because banks are not
allowed to price for the true cost of the distribution
and specifically cash reticulation. For example:
- In Mozambique, the government introduced
regulation that restricts banks from charging
fees for accessing and using bank infrastructure,
especially for cash transactions. This limits the
ability of banks to recoup their infrastructure
investments, creating a disincentive to their doing
so in the first place.
- In Malawi, bank fees have been driven lower than
is sustainable for most banks due to one donor-
funded bank where the donor subsidises bank fees.
The result is that clients have migrated to this
bank, forcing other banks to follow suit. There is
now even less incentive for banks to invest in fee-
based business.
The result is that in both Mozambique and
Malawi bank-based payments infrastructure is
extremely limited.
• Interest rate ceilings cannot justify offering credit. In
all of the MAP pilot countries, interest rate caps for
bank credit make it unviable for them to offer credit
in the low-income market. Banks are able to price
neither for the risk of offering credit in this market
nor for distributing it, which requires them to invest
in new infrastructure and processes. The result
is very little credit offered through banks to this
market.
16. MAP Global Insights Note 4
14
Implications for providers,
policymakers and donors
This note demonstrates that in the six MAP pilot countries, bank account-based
financial inclusion has not translated into significant usage of bank accounts
beyond a mailbox or encashment function. To the extent that bank accounts are
used for electronic payments, savings and credit, this still occurs primarily in
the narrow, traditional higher-income market.
Fatima Cugala is also not an exception. For many people, receiving salaries
and government payments into their bank accounts has effectively reduced
their welfare and financial well-being, since the transaction and opportunity
costs to access that value and turn it into cash can be high. For the most part,
all that has been achieved is that employers and government agencies that
previously had to bear the cost of ensuring payment in cash to the recipient
have transferred those costs to the recipient, who is worse off.
The evidence shows that these outcomes are likely to be produced in countries
that lack a well-developed and ubiquitous bank-based payments infrastructure:
branches, ATMs and POS devices. In this environment a drive for bank accounts
beyond narrow urban areas will not be commercially viable for banks, and neither
would it meet the financial services needs of the new customers. In the six MAP
pilot countries there was also little incentive for banks to change their offerings
and extend their infrastructure, given that customers leave minimal funds in their
accounts that could be intermediated. At the same time, the cost–benefit equation
for extending infrastructure does not stack up.
In the first instance, strategies to increase bank account access must carefully
review whether there are better, more appropriate products, and must be
accompanied explicitly by usage strategies.
Furthermore, policymakers should not target bank account-based financial
inclusion in the absence of an adequate bank-based payments infrastructure.
What will likely be required is an indicator that integrates the density of
bank-based distribution and the reach of cash infrastructure to measure
the connectivity of adults to the banking system. Below a certain threshold,
consumers will not be connected enough to benefit from bank account-based
financial inclusion.
Policymakers can enhance the coverage and utility of existing infrastructure
by encouraging or mandating interoperability between existing proprietary
bank infrastructures. As a general rule, policymakers should not encourage or
require banks to provide low-cost bank accounts or cap transaction fees for
especially cash transactions, since this will further undermine the commercial
viability of opening new accounts.
Banks serious about entering the low-income market should rethink their
pricing models, moving away from a retainer-type fee to transaction-based
fees. Furthermore, they should move to a shared infrastructure model with
other banks, competing on service rather than infrastructure. At the same
time, they need to engage new distribution models such as mobile, which can
dramatically reduce their cost per transaction. However, for the foreseeable
future banks will remain the primary providers of cash irrespective of whether
they move to a mobile front-end or not. Thus, while the recommendation is
that banks not be forced to cap their fees, the challenge will remain to find
17. Lost in the mail
15
ways to make cash available to their customers at the lowest cost - and this
conundrum will require lateral thinking and innovation.
In general, there is a need for new models of client engagement. For banks to
move from a mailbox relationship with their clients, they need face-to-face
engagement, which calls for fresh and innovative partnerships that can work
with the low-income sector. Emerging business models like Airbnb and Uber
have found new ways of intermediating clients within an old-world industry,
and the challenge for traditional financial services providers is to identify new
partnerships that are better able to develop client relationships.
For their part, donors must be very cautious before encouraging or instigating
bank account-based financial inclusion drives in countries with underdeveloped
bank-based payments infrastructures. The same goes for encouraging the
migration of salary payments or government payments to bank channels in the
absence of adequate infrastructure. As this note has discussed, this can create
more hardship than benefit.
Donors also need to pay more attention to existing banking business models in
the countries in which they work. Bank account-based financial inclusion will work
much better where banks have already decided to increase fee-based income and
adjusted their operations accordingly. If 60%-plus of their income is still interest-
based, it will be more difficult to drive financial inclusion through bank accounts.
Furthermore, donors need to reconsider what they are promoting with the
existing measurement frameworks in financial inclusion. Looking back at the
ways that bank accounts can be used – i.e. to transact, save and access credit
– which were the underlying drivers of bank account-based financial inclusion,
this note illustrates that this has not been achieved. The headline indicators
for Findex and FinScope and the AFI Core Financial Inclusion indicators reflect
bank account ownership, by tracking the percentage of adults with access to
an account – be it a deposit, credit or bank account – at a financial institution.
Measurement needs to follow the shift in our understanding of how adults
derive value from formal financial services. For example, the FinScope Financial
Access Strand is constructed in a way that gives preference to bank account
ownership over usage of other formal or informal financial services; whether
account holders actually use the bank account is an afterthought. If the
different categories (other formal, and informal/local) are disaggregated, it
would at least give a representation of the relative importance of other formal
and informal/local providers and an indication that there may be limitations
with regard to the reach of bank accounts.
The evidence from the MAP research has demonstrated that increasing usage
in any given environment calls for meeting a range of complex and dynamic
preconditions. Hence, any strategy to assist consumers to transact, save and
access credit must embrace a much larger strategy, which in the first instance gets
a clearer picture of the market and its drivers, and then builds in continual data
feedback loops linked to customer realities and market growth alike, while allowing
for organic decision-making by market players, governments and donors.
After all, markets are organic and develop at varying paces. While well-
intentioned financial inclusion interventions aim to enable market development,
consumers might not be ready to accept these development initiatives - and
hence such initiatives might run ahead of market readiness. Adopting a
systems approach, which is able to prepare the market, based on the prevailing
attitudes, behaviours and acceptance while offering potential solutions, is more
likely to win consumer support and yield sustainable results.
18. MAP Global Insights Note 4
16
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23. Lost in the mail
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UN Capital Development Fund
Two United Nations Plaza
New York, NY 10017
info@uncdf.org | www.uncdf.org
Tel: +1 212 906 6565 | Fax: +1 212 906 6479
www.facebook.com/uncdf
www.twitter.com/uncdf
MA
PO
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Unlocking Public and Private Finance for the Poor
About UNCDF
UNCDF is the UN’s capital investment
agency for the world’s 48 least developed
countries (LDCs). With its capital mandate
and instruments, UNCDF offers 'last
mile' finance models that unlock public
and private resources, especially at the
domestic level, to reduce poverty and
support local economic development. This
last mile is where available resources for
development are scarcest; where market
failures are most pronounced; and where
benefits from national growth tend to leave
people excluded.
UNCDF’s financing models work through
two channels: savings-led financial
inclusion that expands the opportunities
for individuals, households, and small
businesses to participate in the local
economy, providing them with the tools
they need to climb out of poverty and
manage their financial lives; and by
showing how localised investments –
through fiscal decentralisation, innovative
municipal finance, and structured project
finance – can drive public and private
funding that underpins local economic
expansion and sustainable development.
UNCDF financing models are applied in
thematic areas where addressing barriers
to finance at the local level can have
a transformational effect for poor and
excluded people and communities.
By strengthening how finance works for poor
people at the household, small enterprise,
and local infrastructure levels, UNCDF
contributes to SDG 1 on eradicating poverty
with a focus on reaching the last mile and
addressing exclusion and inequalities of
access. At the same time, UNCDF deploys
its capital finance mandate in line with
SDG 17 on the means of implementation,
to unlock public and private finance for the
poor at the local level. By identifying those
market segments where innovative financing
models can have transformational impact
in helping to reach the last mile, UNCDF
contributes to a number of different SDGs
and currently to 28 of 169 targets.