Archive for: Policy
by Michael Tarazi: Tuesday, February 9, 2010
When it comes to regulating branchless banking, some regulators believe they need to spend a lot of time and energy in developing a comprehensive framework. But putting in place extensive regulations without first observing and understanding how the market is developing can often result in a regulatory framework that is ill-tailored to the risks involved. A more effective approach is to “test and see” – permitting branchless banking business schemes on an ad hoc basis, conditional on measures addressing identified risks. As the market develops and risks are further clarified, regulators will be better positioned to issue more detailed and effective regulation.
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by Michael Tarazi: Tuesday, February 2, 2010
As world leaders in business, finance and politics congregated in Davos last week for the 40th Annual Meeting of the World Economic Forum, two topics dominated public discussions: (i) how to avoid a “double-dip” of a still vulnerable global economy and (ii) how to support disaster relief for Haiti while implementing a longer term strategy for that country’s reconstruction and development.
But more was going on behind the scenes – and branchless banking was the topic of one by-invitation- only session attended by approximately 50 leaders from the banking, telecommunications and technology sectors. Participants included the CEOs of Vodafone, Bharti Airtel, Telecom Egypt, and India’s ICICI Bank.
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by Mark Pickens: Wednesday, January 20, 2010
It’s been an interesting week in Kenya, with several high profile announcements between banks and mobile operators:
- The second largest mobile money service — Zap — tied up with Housing Finance bank.
- Safaricom and Equity Bank announced a tie-up which enables M-PESA’s 8.5 million users to withdraw funds at Equity’s 550 ATMs (the largest ATM network in the country), which may help relieve some problems of agents not having cash.
- Equity made a tie-up in Dec. with Essar, who bought the 4th mobile license in Kenya last year and recently launched the 3rd mobile banking service in the country. Equity’s branches will serve as agents for its service YU. However, this is all one way to withdraw from a mobile wallet at a bank’s ATMs. Bank customers can’t yet go to an agent and withdraw money from their bank account. But that’s coming soon….
It’s not just banks and telecom firms in the headlines. This week, the Central Bank of Kenya plans to distribute for comment draft regulations which will finally enable banks to use agents (about 3 years since Safaricom started using agents for its M-PESA service).
-Mark Pickens
by Michael Tarazi: Thursday, January 14, 2010
I confess guilt. As a lawyer seeking easy solutions to the often thorny questions of how to regulate branchless banking, I was seduced by the argument that if service providers are simply held strictly liable for the actions of their “agents”, then regulators should freely allow the use of such agents. It was elegantly simple. Perhaps too simple.
As it becomes increasingly clear that the largest obstacle to the success of branchless banking is the lack of a viable business model that provides financial incentives to all parties in the value chain (including the agents), regulators need to pay increasing attention to how to allocate risks and liabilities in way that promotes viable business models. All too often, all the burden of liability is placed on service providers – the banks and the MNOs – perceived as powerful and bottomless pits of money when compared against the poor, unbanked target customer or the small retail agent.
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by Jim Rosenberg: Monday, November 30, 2009
6 months + 200 technology and finance leaders from 30 countries = four scenarios of branchless banking for poor people in 2020.
CGAP and DFID invite you to a special webcast discussion of the CGAP/DFID Branchless Banking Scenarios 2020 Project and Focus Note.
The event was webcast live on the CGAP Technology Blog starting at 3pm ET (20:00 GMT) on December 1, 2009.
Watch the video - Branchless Banking Scenarios for 2020
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by Lauren Braniff: Wednesday, November 25, 2009
A sound financial sector rests on timely and accurate information: microfinance institutions (MFIs) require information to monitor their business and make decisions, and supervisors rely on information to verify the soundness and stability of institutions and the market as a whole. At the foundation of this process lies the MFI’s “back office”, which can be broadly defined as the people, processes, and in some cases but not always, technology which help institutions manage their business.
A good back office system lies at the core of every successful financial institution. In many cases, however, MFIs struggle to generate accurate information and reports for themselves, funders, and supervisors. This limits the soundness and efficiency of MFIs, reduces the government’s ability to supervise the market, and in turn, negatively impacts the expansion of access to financial services.
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by Jim Rosenberg: Wednesday, November 18, 2009
For the past several months, we’ve been hearing from many of you about the forces and uncertainties that will shape branchless banking, including mobile banking, and how much (or how little) it reaches poor people over the next decade. We had a series of podcasts with leading thinkers in the sphere of financial inclusion, as well as a prediction market and some serious discussion with the nearly 2,000 of you who have joined the Linkedin group on mobile banking and microfinance.
My colleagues, Mark Pickens and Sarah Rotman of CGAP and David Porteous for DFID took in the views of nearly 200 people from 30 countries to try to answer this question:
How can government and private sector most affect the uptake and usage of branchless banking among the unserved majority by 2020?
I won’t tell you that we’ve answered this question *completely.* But we do have, after just a few months, a new CGAP/DFID Focus Note that concludes that the growing use of branchless banking, including mobile phone banking, is inevitable in most countries. But it’s far less certain whether large numbers of the unbanked poor will use these alternative channels for financial services beyond payments, such as savings and credit. Some highlights:
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by Jim Rosenberg: Friday, October 30, 2009
We’ve been running an occasional podcast series with some of the voices we’re listening to this year as part of the CGAP/DFID Branchless Banking in 2020 scenarios work. The process is based on one driving question: How can government and private sector most affect the uptake and usage of branchless banking among the unserved majority by 2020? You can participate directly through this blog or posting discussions through our Mobile Banking and Microfinance LinkedIn Group. –Jim
Dave Parratt is with MTN Mobile Money, based in South Africa. I spoke with Dave earlier this year to hear his views on how a mobile network operator can make the switch from selling prepaid airtime to a banking relationship. As he explains, it’s easier said than done, though he’s bullish about the future.
Download the Podcast - Dave Parratt
by Jim Rosenberg: Tuesday, October 27, 2009
What’s more convertible for currency – a mobile payment or a goat? At the moment, in India, the goat is the only option for many people. So said Vikram Akula, chairman of Indian microfinance powerhouse SKS at today’s plenary session on correspondent (branchless) banking, chaired by CGAP’s own Greg Chen at this (at times overwhelmingly large) microfinance jamboree in Delhi.
“We have financial apartheid in India. Yes, we have microcredit. But when it comes to cashless payments and a safe place to save, poor people are not just not included – they are financially excluded,” Akula said. “The business correspondent model, if done correctly, can end financial apartheid.”
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by Jim Rosenberg: Wednesday, October 14, 2009
We’ve been running an occasional podcast series with some of the voices we’re listening to this year as part of the CGAP/DFID Branchless Banking in 2020 scenarios work. The process is based on one driving question: How can government and private sector most affect the uptake and usage of branchless banking among the unserved majority by 2020? You can participate directly through this blog or posting discussions through our Mobile Banking and Microfinance LinkedIn Group. –Jim
 Ignacio Mas is Deputy Director in the Financial Services for the Poor program at the Bill & Melinda Gates Foundation. Ignacio has been a Senior Adviser in the Technology Program at CGAP, Vice President of Marketing and Account Management at interTouch, Director of Global Business Strategy at Vodafone Group, and Senior Manager responsible for telecoms investments in Europe at Intel Capital. Ignacio has been a Visiting Professor of International Business at the Graduate School of Business at the University of Chicago. He holds undergraduate degrees in mathematics and economics from MIT and a PhD in economics from Harvard University. Ignacio was among the workshop participants at our event in Capetown earlier this year. Though the nascent growth of branchless banking in places such as Kenya and the Philippines is truly exciting, Ignacio explained why the Bill & Melinda Gates Foundation is focusing on savings as a way to ameliorate poverty, and how technologies such as card networks and mobile phones might help. Download the Podcast - Ignacio Mas
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