US Banker | November, 2009
Savings institutions in 10 developing countries will participate in a project to sign up the unbanked as customers, in a three-year project organized by the World Savings Banks Institute and funded by a $20-million grant from the Bill and Melinda Gates Foundation’s Financial Services for the Poor initiative. The banks will fund 20 percent of the cost of their projects, which aim to bring 10 million adults into the formal financial services sector. A recent report from the World Bank’s Consultative Group to Assist the Poor (CGAP) estimated the number of unbanked adults in the developing world at 2.7 billion people. WSBI members provide financial services to all socio-economic segments, including the very poor.
The banks participating in the WSBI projects are SONAPOST (Burkina Faso); Sistema Fedecrédito (El Salvador); Bank BTN (Indonesia); Kenya Post Office Savings Bank; Lesotho Postbank; Poste Maroc (Morocco); South African Post Office; Tanzania Post Bank; Postbank Uganda; and Vietnam Postal Service Co. All but two are state-owned institutions, says WSBI director of training and consultancy Ian Radcliffe. Sistema Fedecrédito is federation of private banks and credit unions, while Tanzania Postal Bank is state-controlled with some private ownership. Bank BTN “plans to launch an IPO next year,” he says.
Radcliffe, who is also managing the overall effort, says each project has an maximum eight-month window for implementation, “although beneficiary banks have five years to achieve targeted numbers of new usable accounts.” The projects will be staggered—the first two are set to start up this month in Kenya and Uganda, while the last will go on stream in June 2010, “all projects are expected to be complete by September 2011,” says Radcliffe.
Proper identification will be a hurdle, he acknowledges. “This is indeed an identified risk in some of the projects to be supported and will call for a degree of interaction with regulators,” according to Radcliffe. “In some cases, internal identification requirements go beyond legal requirements. Accordingly, all account-opening procedures will be examined.”
The banks will bridge the branch gap by using “mobile solutions, agent networks and the inclusion…of postal savings banks with broad distribution networks, including in rural areas,” says Radcliffe.
WSBI member banks from some 40 countries expressed interest in the program. The participating banks are not looking to partner with global institutions.
Print
Email
Reprints
Feedback