The Posts: a Universal Library to Promote Financial Literacy?

Having visited numerous post offices in developing and emerging countries, it is often striking to notice the space left available and not utilized in front of their counters. This is just one more sign of what is the most underutilized asset of the Posts – their network – as recently highlighted by the UPU POC Chairman – Dr. Andreas Taprantzis – during our UPU-AFI workshop on financial inclusion and postal banking.

During the same event, Christian Sinobas from PlaNet Finance was rightly pointing out that while improving geographical access can be secured with impressive results through the use of agents (or correspondent banking), nothing was guaranteeing that people living 50 meters away from a post office – acting as a bank agent or itself as a postal bank branch – where an offer of basic financial services is available will indeed use these services. Financial literacy may appear as a significant barrier to effectively take advantage of an improved geographical access.

If one thinks in a creative way, one can easily understand that a physically under-utilized post office space can not only provide a counter for financial services, but also become a permanent library to promote financial literacy. Posts have already proven their effectiveness in campaigning against AIDS in their offices, or delivering school books on time for millions of Brazilian students every year. So why couldn’t Posts use an area in each of their offices for increasing people’s financial readiness? What other network can propose 500,000* libraries reaching the poorest segments of the world’s population?

What do you think? Leave your comment below.

* Number of post offices in developing and emerging countries

Also see: CGAP’s Financial Literacy Meets the Mobile Network Operator

Recent initiative: Pacific Islands – Building Financial Literacy in the New Year

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One comment

  1. Hans Boon · · Reply

    Branchless banking or post- branch_banking in 2020 ?

    One week after the UPU-AFI workshop CGAP newsflashed with scenarios for branchless banking in 2020. That is interesting ! See:
    http://www.cgap.org/p/site/c/template.rc/1.9.40599/ .

    However the word “ post” occurs in the paper only in combination as POST-conflict, and branchless banking does not identify (yet) the post office as the post-bank_branch option, including the mobile phone technology to reach out to the poor. The cases discussed in those scenarios regarding e.g. Brazil, Kenya, South Africa do not mention the ongoing role of the post offices in mobile money and the reference list does not include any postal data/publications.

    The “branchless banking 2020” scenarios build on the feature of the 250.000-300.000 brick and mortar outlets for mainly urban banking, and expansion is indeed limited from an economic point of view. Expansion through ATMs faces also limitations, as capital expenditure remains relatively high, maintenance, and often usage is only to withdraw a monthly salary or remittances. The question whether some one is “banked” if he/she has an account and a card to withdraw 10 times per year the income is not answered. The scenarios overlook the nearly 500,000 post offices in the developing world, with more than 350,000 in rural areas. If equipped with EFT POS terminals and other standard and connected ICT they could be a part of the basic global access infrastructure. The paper also does not view on the linkages between post and telecom. Many post offices do have a function in sales of telecom services and cash collection, providing a phone booth, and mobile technology is also emerging for the postmen, to provide an efficient delivery service, but linked applications between mobile mail logistics management and mobile money delivery have yet to be designed.

    Perhaps one could indeed agree that 2020 is the post-bankbranch era, as by then MFIs, Agents, Post Offices, ATMs, Self Service Terminals reach out to the “unbanked”.
    That is all very much dependent on the degree of financial literacy.
    In that respect the Post office is not only a potential “library” but with proper ICT it could be the local “e-learning” centre, as part of a broader “portal” function to the e-conomy. Moreover post offices and schools could re-invent a new tradition of ‘school savings’ to help to familiarize the new generation with financial literacy and encourage savings and cashless payments.

    This sounds extremely nice, but as the CGAP scenarios indicate, there is a dramatic gap in today’s “literacy” about the dream potential and the real problems in involving the post offices in financial literacy, access and inclusion. The challenge today is not only at the bottom of the financial pyramid but more at the top. Apparently there seems to be a lack of convincing “literature” for mobilising broad support to an internationally coordinated approach to involve the nearly 500,000 post offices for financial services delivery through standard ICT solutions and effective business models.

    From a high-level macro perspective 500,000 post offices in the developing world serving each on average 5000 micro-customers is 2.5 billion people being included, from unbanked young school children to old aged pensioners. To enable that globally requires an investment and development budget in the range of US$ 5 to 10 billion. A enormously large amount, but much bigger sums have recently been injected in commercial banks to “rescue” them. Many of these banks spent US$100 or more to acquire a retail client.

    The UPU-AFI workshop was an unique event to highlight the potential and to improve awareness. The follow up is a challenge. With the technology developments in mobile and internet gaining pace the pressing question emerges : Will 2020 be the year of branchless banking, post- branch_banking, or less post offices ?

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