Archive for: Remittances

For some, El Salvador is famous for some of the best surf spots in Central America. For others it is the kilometer-long black-sanded beaches that come to mind. This week, for the Latin microfinance community, San Salvador will be famous for one of the largest and most reputable microfinance events of the region: The 10th Inter-American Forum on Microenterprise.

Looking at the agenda, the three day conference brings together an amazing group of around 1,500 of the region’s microfinance providers, its networks, governments, donors, and even the royals with the participation of H. M. Queen Sofia of Spain.

CGAP is organizing a panel on technology’s potential to increase outreach and depth of access to finance. Our project partners Visa Credibanco and GXI, as well as Opportunity International will share their lessons learned and challenges to implement technology projects.

Watch this space for more.

CGAP and Microsoft Research India (MSRI) are collaborating on joint research to better understand the needs of people who have low levels of literacy when it comes to technology. In plain English, this means we all want to know how to design something that would be of use to an illiterate person.

In addition to the focal research on User Interface design, the MSRI-CGAP collaboration will also involve joint explorations in understanding the social and economic context and impact of mobile-banking on poor households.

What we learn will be shared with everyone. Aishwarya Ratan is with MSRI and joined us in Washington at our conference this week to talk about the work envisioned and some of the things MSR has already learned in India. Here are her thoughts.

Read the rest of this page »

Happy Monday…this Monday is more auspicious than most because it’s the start of our three day conference looking at how technologies such as card-based networks and mobile phones could increase access to finance. IFC is a co-organizer, and Visa is a sponsor.

Want to know more? Visit here for the full agenda.

We’ll be posting presentations as we get them…and this link should take you to a live video stream of the event.

Great news…several of CGAP’s publications have been released in Chinese and are now available online. Here are two of our favorites:

Using Technology to Build Inclusive Financial Systems
Focus Note No. 32, January 2006 (Chinese, pdf)
Some of the innovations commercial banks need to service poor clients may be found in information and communications technologies (ICTs).This Focus Note addresses the following questions: Can banking technologies, applied innovatively in developing countries, make microfinance profitable for formal financial institutions? Will they reduce costs to such an extent that banks could profitably serve even those whom MFIs have mostly excluded to date, such as very poor and remote rural customers? Will these customers be comfortable using technology?

Use of Agents in Branchless Banking for the Poor: Rewards, Risks, and Regulation
Focus Note No. 38, October 2006 (Chinese, pdf)
Use of Agents in Branchless Banking for the Poor: Rewards, Risks, and Regulation
This Focus Note examines the experience of five pioneering countries–Brazil, India, South Africa, the Philippines, and Kenya–where agent-assisted branchless banking that targets poor customers is already a reality. It introduces the main issues involved in regulating branchless banking, particularly regarding the use of retail agents.

Banking agents have helped increase access to finance in Brazil. But success seems to be bringing competition among partners. The Valor Economico reports that Correios, the Brazilian postal network and Banco Bradesco, the country’s largest private bank are fighting about the postal bank they operate together. 

Banco Postal was born out of a joint venture between Branco Bradesco and Correios in 2001. Banco Bradesco bid US$90 million for the 10-year contract and beat Itaú and state bank Caixa Economica Federal.

“Before we arrived, people in São Francisco de Paula had to go 10 kilometers to the nearest town with a bank to withdraw salaries or pensions,” said André Rodrigues Cano, a former Banco Bradesco director.

This was in March 2002 when, Banco Postal’s first branch opened in remote Sao Francisco de Paula in the south of Brazil. Now it seems as if Banco Postal account holders in rural and remote Brazil may have to take the bus again to reach their branch.

Banco Bradesco did not plan on building branches; they decided to use the postal outlets as their correspondentes bancarios, banking agents that deliver financial services.

Within only five years, Banco Postal was able to turn 5,460 postal outlets into full-service banking agents at which clients could pay their bills and withdraw their salary, but also deposit money and transfer funds to a relative in for example Sao Paulo. Today, Banco Postal acquires 4,500 new clients per day, and as of May of this year had opened 5.5 million bank accounts.

But now, its existence seems to be in doubt. Early in 2007, the battle between Correios and Bradesco began in earnest. The government would like to launch its own bank through the postal network providing microcredit, pension plans, and other services. So it may cancel its agreement with Bradesco. The reason primarily being that Bradesco seems to be making too much money off the state’s distribution network. Of the newly planned financial institution, the Brazilian government would keep 51% and the other 49% would again be auctioned to banks such as Itaú, ABN Amro, and Bradesco that have shown interest.

What I’m wondering is what will happen to all the account holders?  Will they be transferred to the new financial institution? Will Bradesco have to open outlets in some very remote locations to serve them? Banking agents have been so successful in Brazil…but would clients now be left behind?

Stefan Staschen works with CGAP’s technology and policy teams. He presented on CGAP’s behalf at the Third African Microfinance Conference in Kampala late in August, and shared with us his impressions of the conference.

Not one or two or three, but four presentations at the AMC in Kampala, Uganda, dealt with the use of technology for increasing access to financial services. Richard Ketley from Genesis Analytics talked about Alternative Service Delivery Mechanisms and the card and phone revolution in Africa. His main conclusion was that African microfinance institutions (MFIs) can leverage existing technology such as mobile phones, ATMs and the internet to counter the negative impact of operating in a high cost environment and more often than not using inefficient business models.

Read the rest of this page »

The Consultative Group to Assist the Poor (CGAP), United Nations Foundation (UN Foundation) and The Vodafone Group Foundation (VGF) today released the first public findings on how low-income individuals in South Africa use mobile phone banking (m-banking). The findings confirm early optimism about the potential for mobile phones to bank the poor, in particular showing that m-banking can be up to a third cheaper for customers than the current banking alternatives.”Mobile phone ownership is exploding in developing countries, presenting a tremendous opportunity to deliver financial services cost effectively to the nearly three billion people who do not currently have bank accounts,” said Elizabeth Littlefield, CEO of CGAP. “And that matters because financial services can help poor people increase household incomes and build assets, making them less vulnerable to crises so that they can ultimately plot their own paths out of poverty.” Globally, there are more than 2.5 billion mobile phones, more than half owned by people in developing countries.

press release | download the report