Our program aims to understand how technology can make financial services accessible to all people, regardless of their income, education level, or place of residence. To do this, the CGAP program researches and experiments with technology approaches that seem to have near-term potential to massively expand access to finance. That is, their acceptance by poor people and their viability remains unproven, and we need to better understand how to implement them.
Project Applications - Second Round Assessment Underway
A second round of applications is being reviewed. Those that are pre-selected for further consideration will be notified soon. CGAP offers strategic and technical advice, funding, and in-depth research to support selected projects. Successful applicants will also get assistance to develop a business plan.
First Round Projects
Our first round of projects are in development now. They are organized around a key research area - banking agents. Banking agents can help institutions increase their customer base and point of sale coverage without incurring the high upfront cost of building branches. Lower set up and running cost should enable providers to reach further into rural and remote areas and serve poor clients with a full set of services in a sustainable way.
In a three-year project supported by CGAP, Credibanco, the Visa franchise holder in Colombia, will extend and adapt its technology and service infrastructure to help the country’s banks reach low-income customers and equip small merchants like grocery stores, pharmacies and gas stations with point-of-sale devices. Rather than having to travel by bus to a neighboring village to reach the nearest bank branch, Credibanco will deploy vans to help low-income customers sign up for a bank account in their villages. Using satellite connection for the real-time credit bureau consultation and the interface with the bank’s information systems, customers will learn how to use their new debit card, and they can take it home immediately.
Kenya: Equity Bank, a leading Kenyan bank established in 1984, delivers a range of financial services to over 1,000,000 low-income clients and accounts for about 12 per cent of all bank accounts in Kenya.
CGAP is planning a project with Equity to test how mobile phones and a network of merchants can deliver deposits, payments, transfers, and credit to 1.77 million mostly rural Kenyans. Equity will also explore the possibility of extending loans channel with clients having minimal touch with Equity’s loan officers.
Mexico: Te Creemos is a regulated microfinance institution whose main aim is to give low income populations in urban and suburban regions of Mexico. Through a partnership with Farmacias del Ahorro, Te Creemos branches use the existing infrastructure of the pharmacy’s 600 outlets to conduct financial transactions. Te Creemos has also begun to use biometric point-of-sale devices at retail outlets to extend its network beyond the reach of the pharmacy chain.
CGAP will test customer response to financial services delivered with POS and card-based technologies.
Mongolia: XacBank is a microfinance bank with more than 60 branches and units throughout the country, and over 80 franchise Savings and Credit Cooperatives. The Bank has over 50,000 active borrowers and offers fourteen loan products and seven savings products, money transfers, payment settlement and leasing services.
CGAP is planning a project with Xac Bank to test the delivery of financial services to extremely remote populations using mobile phones and a network of cash-handling units at post offices and gas stations.
Pakistan: Tameer Bank is a microfinance bank aimed at serving the economically active poor in Pakistan with a range of financial services, ranging from savings and credit to home improvement loans and term deposits. In less than two years of operations, Tameer has established nearly 25,000 clients and 17 branches.
CGAP is planning a project with Tameer to test the delivery of financial services to poor clients using mobile banking and an agent network in urban slum and rural markets.
Philippines: Globe Telecom offers mobile banking to clients in the Philippines.
Globe, a mobile operator in the Philippines, provides mobile banking services to over 500,000 clients. This service, called G-Cash, transforms mobile phones into “mobile wallets” allowing subscribers to send and receive domestic and international remittances through SMS, make purchases/payments at retail establishments, pay bills, and convert G-Cash to prepaid mobile credits. G-Cash was launched in October 2004.
The project will test how poor people respond to a “mobile wallet” product in lieu of a bank account, and will also test a hybrid model in which rural people can use a mobile phone to access an account in 11 rural banks for microfinance loans, deposits and remittances.
South Africa: WIZZIT is a virtual bank targeting the 16 million unbanked or underbanked South Africans - about 60 percent of the country’s population. WIZZIT clients can use their mobile phone and a debit card to transfer funds to other bank accounts, purchase mobile airtime, pay bills, make purchases at retail establishments, and purchase pre-paid electricity, all from the convenience of their mobile phone. After less than two years of operations, WIZZIT has over 50,000 clients.
CGAP is planning a project with WIZZIT to test customer adoption of its service by farm laborers and poor clients in rural areas and small towns. WIZZIT will deliver financial services to these populations through mobile phones and POS devices at community phone kiosks and rural stores.
Kenya: Social Protection Payments Challenge Fund. CGAP will partner with the Financial Sector Deepening Trust to support experiments that test how technology canhelp deliver financial services in conjunction with social protection payments. These payments will be made by the Government of Kenya, with donor support, to families housing orphans and food-insecure Kenyans in the arid northern region of the country.
The Financial Sector Deepening (FSD) Trust is a donor-supported but independent entity established to support the development of financial markets in Kenya as a means to stimulate wealth creation and reduce poverty.
Maldives: Maldives Monetary Authority, the country’s central bank, has requested CGAP’s guidance to test if universal access to banking services and a dramatic reduction in cash usage are possible through an interoperable mobile banking system and a nationwide network of cash-handling agents. The project will benefit the 300,000 people living in the Maldives and mitigate the cash management challenges arising from the country’s landscape of 200 geographically dispersed islands.
In mid-2007 this project was joined by the World Bank.
