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E/M-Banking Booklet: Volume III

Posted on by Parul Tandon

The E/M-Banking Booklet – Volume III is the seventh publication under the Optimising Performance and Efficiency (OPE) Series. The OPE Series brings together key insights and ideas on specific topics, with clear objective of providing microfinance practitioners with practical and actionable advice.

In response to repeated demands from practitioners, MicroSave has developed this third compendium of brief publications on e/m-banking. This compendium mines MicroSave’s rich experience including the acclaimed analysis of dormancy in India no frills accounts and Indian households’ willingness to pay for agent-based financial services, as well as the recent analysis of the role of M-PESA in the landscape of Kenya.

Sustainability of BC Network Managers (BCNMs) – Review of Commission Structures

Posted on by MSC

Business correspondents (agents) and their managing support organisations, BCNMs, play a very important role in promoting Financial Inclusion in India, yet they often face the biggest challenge of sustainability.

This Note critically analyses the different commission structures and the implications this has on the top-line revenue of the BCNMs. For this purpose, MicroSave analysed six actual branchless banking commission structures offered by three major banks in India. The objective of this note is to present common ways banks use to compensate BCNMs for various services and provide an indication of commissions that may be relatively more rewarding.

Can Bank-led Models Really Deliver on the Promise of Mobile Money?

Posted on by Parul Tandon

There is some debate, but not enough, about the potential profitability of the mobile money solutions that are so widely promoted as the answer to financial inclusion.

In MicroSave’s Briefing Note # 97 “The Business Case for Branchless Banking – What’s Missing?”, Ann-Byrd Platt argues that banks are not interested in the potential business at the bottom of the pyramid because:
– it requires a radical re-work of their old business model; and
– the burgeoning middle class in developing countries already present a tremendous business opportunity that is both easier and fits the current business model. This is true for the vast majority of banks.

However, there are potentially important exceptions highlighted in this Note. A diversified product range could provide tremendous opportunities to increase revenue streams, while de-congesting banking halls, both for loan application and for deposit and repayment transactions. The potential for profitable mobile- and agent-based financial services is clear.

Effective pricing models and customer willingness to pay

Posted on by MSC

“In this video Graham A. N. Wright, Group managing Director, MicroSave, gives an overview of the success of mobile banking in Africa. He says that the cultural norm of charging for financial services by banks is one of the reasons why mobile money has taken off quickly in Africa.

NextGen Mobile Wallets: The Slim Billfolds May Prove More Lucrative

Posted on by Parul Tandon

Mobile wallets are often discussed, and often misunderstood, as the new way to think about payments and banking services-for both rich and poor. Mobile phones may be the only technology that is equally interesting to both ends of the economic spectrum right now.

Mobile wallets are no different from any other aspect of financial inclusion .The dominant player is still usually the bank. Nevertheless, seamless cooperation amongst all players matters more for m-wallets than most inclusion efforts. And two recent announcements-a Google-Citibank-First Data collaboration and Square, a new m-wallet led by Twitter’s founder Jack Dorsey-augur well for both low-income customers and retailers around the world without credit-card terminals, electronic cash-registers, and other expensive POS devices.

Sustainability of BC Network Managers (BCNMs) in India – How are BCNMs Paid?

Posted on by MSC

“There have been various studies carried out on international branchless banking commission structures highlighting the benefits and drawbacks of different pricing methods for the end user/customer, and the importance of these for adoption.

However in the case of bank-led branchless banking operations, the agent network managers (Business Correspondent Network Managers – BCNMs in India) doing the heavy operational lifting in the field, are often forgotten when it comes to commissions and sustainability. This Note examines the different product revenue drivers based on how banks remunerate BCNMs, provides an overview on different commission calculation methods adopted by banks, and analyses different scenarios related to revenue maximisation.”