Branchless banking scenarios 2020: CGAP invites us to debate

On 1 December 2009, CGAP invited us to debate the 2020 branchless banking scenarios in their technology blog. We submitted the following question, maybe you also have your opinion. So post here or there!

One of the most important issues in branchless banking is to align the interests of the poor, the agent and the bank (or financial partner). So far, discussions have focused on the principal-agent relationship between the agent and the bank, that is a one-sided agent model. Achieving sustainable financial inclusion may require a two-sided – or multi-sided – agent approach, with the same agent not only acting for a bank but also for a group of low-income people, and by so-doing better aligning the various parties’ interests. Do such agents exist? We think so: some agents may enjoy the trust of the poor, be very close to them, offer affordable services while simultaneously benefiting from a joint-venture with one or several banks (or other financial entities) and deliver many activist governments’ benefits. One of these multi-sided agents is called the post office, with three striking cases in Brazil, India and China. So why don’t we pay more attention to multi-sided agents that can better internalize and align the interests of different parties?

Interestingly, this approach was partially introduced in one of the CGAP scenarios related to Self Helf Groups. In our opinion, the more a platform (be it mobile telephony or/and postal operator) has aligned interests with the Self Helf Group, the better it will internalize these interests when dealing with the other side of the platform, i.e. the bank and/or financial partners. Post offices, through their local presence and proximity to Self Helf Groups members, are often trusted institutions and have universal service obligations (USO) that may ease the alignement of interests between them and Self Helf Groups.



  1. Fully subscribe to this model.
    Since 2003, we have convinced our Central Bank in Mauritius and are operating in an outsoucing capacity Basic Banking transactions towards customers across our whole network in Mauritius and surrounding islands in Rodrigues and Agalega.
    The Post here commands trust and confidence and the rural and remote villages as well as our staff value this value-added banking services.
    The model remains dynamic of course.
    G. Moteea

  2. Odile Pilley · · Reply

    A long-kept secret in facts and figures: the role of post offices in financial inclusion.
    You are surely aware that post offices are among the most trusted institutions in many countries. Their position has been strengthened by the financial crisis with many people switching from bank accounts to post office accounts.
    Did you know too that there are :
    • 1.5 billion existing financial services users through the post office network;
    • 500,000 post offices in the developing world with an average of 5,000 micro-customers
    • 350,000 rural post offices in developing countries
    Indeed, which other network is better positioned to take up the challenge of financial inclusion for a large section of the remaining 2.5 billion un-banked citizens in the developing world ?
    However, there is little hard data to argue this self evident case with policy makers.
    Postal financial institutions, which can be century old entities rooted in their local culture, often fall under specific regulations. These regulations have evolved especially in the last twenty years, as a result both of liberalization and new public policy initiatives in the field of financial inclusion. The word “Postbank” covers all sorts of organisational and legal structures. Some postal financial services institutions have become, or been merged into, fully fledged publicly quoted banks. Others are privately owned while some remain fully state-owned. Some are part of the post, and the post can be itself an administration. Postbanks can be dedicated postal financial institutions subject to specific regulations. “Postbank” can refer to a brand for banking services provided through the post office by means of an agency agreement with a financial services provider. The brand “postbank” can even be used by banks which do not have much in common with the post apart from an historical connection, but that prefer to keep this name for marketing reasons (trust building and customer retention). Some postal financial institutions have been absorbed into financial conglomerates, themselves dramatically affected by the recent crisis. New “postbanks” were also created and they reflect the diversity of postal financial services institutions.
    The value propositions of these postal financial institutions have evolved in parallel with their organisational structure, from traditional postal savings and payment services, to:
    • banking services ,
    • reinvented fully modernised services
    • new services delivered through integrated physical and virtual channels.
    Thus, words like “postal savings accounts or giros” may cover services very different in nature.
    As a result, new data need to be gathered and a consistent basis for collection developed. This has to take into account the existing information base, which includes:
    1. UPU statistics that focus on traditional postal financial services (savings and payments )
    2. Central banks: national, regional (EU) and world statistics (CPSS/BIS)
    3. Other specialist statistics such as those of the World Savings Bank Institute or microfinance networks
    A two-part study on the regulatory situation of postal financial services and related statistics would be more than welcome. This would be a natural complement to the IMF’s Access to finance project pioneered by the UN Secretary General’s Special Advocate for Inclusive Finance for Development
    Please feel free to provide any idea about :
    • Possible methodologies
    • additional sources of information

    Marie-Odile Pilley
    UPU Postal Financial Services Expert

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