Archive for: South Asia
Continuing his stint as a guest blogger, Jan Chipchase noted that all mobile banking is personal while challenging the assumption that the unbanked need access to mobile money services:
This author’s position is that the introduction of mobile banking services is having, and will continue to have a disproportionately positive impact on the poor compared to their wealthier counterparts. What are the needs of the poor in this space? What does it mean to ‘design for inclusion’? And given that growth is largely driven by profit seeking corporations where do the needs of consumers, corporations and other stakeholders diverge?
Read the rest of this page »
 This is part of a series of blog posts we are doing based on new research about business correspondents (agents) in India. The India research was one part of a three-country study (along with Brazil and Kenya).
A notable difference in the role of banking agents (also called Customer Service Providers or CSPs) in India compared to other countries is that the agents are responsible for customer acquisition in addition to processing transactions.
Read the rest of this page »
by Mark Pickens : Monday, April 19, 2010
 photo by Claudia McKay The regulatory changes made in India last year have uncorked a stream of new branchless banking launches. Three new providers have or are just about to go to market.
They join three other firms who have been beavering away at branchless banking and are now gearing up for big growth: FINO, Eko, and A Little World.
Read the rest of this page »
Bindu Ananth is the President of IFMR Trust, which has a mission of ensuring that every individual and every enterprise in India has access to complete financial services. In pursuit of this, IFMR has made four key investments – IFMR Rural Finance (full service financial institutions for remote rural India), IFMR Capital (guarantee company for high-quality MFIs), IFMR Mezzanine (subordinated debt provider for emerging MFIs) and IFMR Ventures (debt access for rural enterprises). Through these investments as well as other initiatives , IFMR Trust is advocating for an inclusive financial system in India. Recently I interviewed Bindu about how the financial system in India might be configured to deliver complete financial service access.
What is the approach IFMR advocates for that is different from all the other models being used in India, such as scaling up microfinance institutions (MFIs), reforming the cooperatives, promoting the self help group/bank linkage model, or the current favorite of policymakers, the business correspondent model linked to the use of technology?
Our vision for the Indian financial system has three parts:
- An adequate number of local, high-quality financial providers that provide complete access to financial services. (We have borrowed heavily from Prof. Jonathan Morduch in defining complete access to be: reliability + continuity + convenience + flexibility + increasing financial well-being.)
- Orderly ways for systematic risk to be transferred from these local providers to risk aggregators. This would be done through mechanisms like reinsurance and securitization, among others.
- The presence of well-regulated and well-capitalized aggregators like commercial banks, mutual funds, and insurance companies.
Several of the initiatives you mention as models are in line with our vision that I just described. For example, a local microfinance institution that securitizes part of its portfolio to a mutual fund transfers systematic risk now to the mutual fund. This is a perfect partnership because the MFI is very good at customer origination and monitoring and the mutual fund has the ability to provide vast amounts of liquidity for the growing demand because of its size, capitalization, and diversification. Similarly, the banking correspondent (banking agent) that is providing savings services on behalf of a well capitalized bank would be consistent with our approach.
Read the rest of this page »
by Mark Pickens : Tuesday, February 16, 2010
This week we’re blogging from Barcelona, site of the Mobile World Congress. Today is the second full day of focus on mobile money, where the GSMA’s Mobile Money for the Unbanked working group convenes market players to compare notes. CGAP Microfinance Specialist Mark Pickens is presenting the latest work we’ve been doing on agents.
Industry actors say their biggest unknown is how to build a viable network of branchless banking agents. Over the next 3 months, CGAP’s Technology Program will analyze agents in 3 reference countries (Brazil, India and Kenya). Because this area is so new, we will be out in the field ourselves talking to agents, network managers and banks.
We’ve already begun in Brazil, where CGAP is partnering with The Center for Microfinance Studies at FGV (Fundação Getulio Vargas), the leading Brazilian business school. Planet Finance Brazil is also a partner in the field research. Data was gathered on 295 agents, 49 of which were interviewed in-person. Read more about this collaboration.
-Mark Pickens
Next: A round-up of mobile banking developments from the Mobile World Congress.
by Greg Chen : Tuesday, February 9, 2010
Could new technologies in Bangladesh enable formal financial services to reach two-thirds of adults by 2020?
Conditions in Bangladesh offer scope for some optimism. Famous for high population density, Bangladesh may be able to deliver a larger volume of financial flows over a relatively smaller distribution network; possibly making the business case more tenable. The demand for remittance services is likely to be high. There are large numbers of Bangladeshis remitting from overseas. There are plenty of internal migrant laborers needing to send money home – well illustrated by the the ubiquitous rickshaw drivers of Bangladesh’s capital, as one example. Other countries, notably Kenya, have seen branchless banking surge because of domestic money transfers.
Read the rest of this page »
by Chris Bold : Thursday, February 4, 2010
 I would be pretty annoyed if my bank started to charge me for putting money in to my bank account. What strategy would CGAP’s partner in Pakistan, Tameer Microfinance Bank consider with their “mobile wallet”? I spent a week in Pakistan with Ali Abbas Sikander and the Easypaisa team who have been thinking about their pricing strategy for the past three months.
Read the rest of this page »
by Mark Pickens : Friday, January 22, 2010
Some of you probably saw a snippet on the nightly news about Secretary Clinton’s speech on Thursday about freedom of the internet and other technology. If you read CGAP’s recent focus note on the future of branchless banking in 2020, you’d know we also think the internet is going to have a deep qualitative impact.
It turns out Secretary Clinton had a lot to say about mobile banking. I found three parts particularly relevant for the work we do on banking the unbanked.
Read the rest of this page »
by Chris Bold : Tuesday, January 19, 2010
Today we welcome Chris Bold as a new blogger for CGAP. Recently, Chris joined CGAP’s Technology Team on leave from the UK Department for International Development where he worked in their Financial Sector Team and, for the last year and a half, was based in Kabul managing DFID’s private sector development programs in Afghanistan. Chris will be providing additional support to CGAP’s portfolio of projects and exploring how large flows of money such as government payments and remittances can be harnessed to bring financial services to the unbanked.
It’s hard to think of a tougher environment in which to test the potential of mobile banking than Afghanistan. With a population of 30 million people, 36% of whom live below the government defined poverty line and 74% of whom are illiterate; Afghanistan is the poorest country in the world outside Africa. But bringing banking services to Afghanistan is exactly the challenge that Roshan, an MNO majority owned by the Aga Khan Fund for Economic Development, is taking on. We met with Zahir Khoja, Roshan’s Executive Director for M-Paisa, on a recent visit to Afghanistan to discuss the roll-out.
Read the rest of this page »
by Kabir Kumar : Monday, November 23, 2009
EasyPaisa, the m-banking service by Telenor and Tameer, went live on Oct 14. They call it the “largest branchless banking service in Pakistan” on their website where you can watch a couple of the ads that people may have been discovering on You Tube.
 Photo courtesy Patrick Cooks 3000 agents have been set-up to handle both bill payments and remittances. They aim to have many more trained and branded by Jan. They have covered the country with marketing, promoting the brand everywhere and pushing people to the agent network. The advertising has generated a lot of buzz and interest and their two call centers are fielding over 5000 calls a day. As of two weeks ago, they had all the major billers signed up and those previously not interested were now calling them (see here about a minor scuffulle in the media about billers which seems to have passed).
They are seeing modest success. Within the first few days, they handled 20,000 bill payments ranging from very large to small at an average ticket size of $13.
Why is this launch any more interesting than what we are seeing in other markets?
First, it is true that even in Pakistan, m-banking services have been live for a while. Mobilink partnered with the post office chain and has been in the market for almost a year. But what is unique about EasyPaisa is the business model. Telenor owns part of Tameer and that provides for unique advantages on the cost side and benefits in terms of product design.
Second, the partnership illustrates the possible tie-ups between a MF provider and a MNO. In this case, the MNO bought the MFI. In other cases, the MNO could strike a revenue sharing arrangement with the MFI in exchange for access to its distribution.
Third, the partnership illustrates how regulation and policy decisions from both the banking and telecom side can add up to produce impact. On the banking side, regulation opened up the market for the use of retail stores as agents (CGAP has been involved with branchless banking regulation in Pakistan from the beginning). Regulation made it possible for a bank and telecom operator to enter into unique partnership arrangements.
On the telecom side, MNOs are in a race to the bottom in their core business. Prepaid ARPUs are half of what they were three years ago. This race to the bottom has been precipitated by new licenses (there are seven operators in the market today) and number portability. MNOs had to climb the value chain of services faster than what you might see in the other markets.
The EasyPaisa service is within the bounds of the vision and strategy CGAP set out with Tameer Bank originally: it is both bill payments and remittances (our original financial model was with bill payments); people have the option of opening a savings account; KYC is automated using the national ID which now covers over 50 million people.
We have a lot to be optimistic about but one of our main concerns right now is that account opening is possible only at a subset of agents, roughly a third of the network. This is because of SBP requirements over account opening. While EasyPaisa locations where you can open an account are still sizeable in number, we know from the M-pesa experience (and common sense) that you want to make it as easy as possible to get people to start transacting. People will be able to do cash-only transactions (cash to cash or cash to account) at all EasyPaisa locations; so that helps. But we are figuring out a way to make account opening possible at all agents – possibly a specialized device or a document management system or something else.
-Kabir Kumar
|
 |
|
