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Branchless Banking Update: Should We Bank on Phones or the Post?

Posted on by Parul Tandon

The term “branchless banking” may no longer be the most accurate way to describe what is currently going on in financial inclusion and microfinance. Are banks and branches even the two most important components?

For the past five-six years, most efforts to move money via mobile phones or point-of-sale (POS) terminals have required full bank participation, or at least bank partnership and oversight. Reasons include deposit insurance, customer and payment authentication, fraud control, G2P government disbursements, and the actual issuing of money. This note discusses these issues and concludes that for the present, in answer is yes: a full banking license and a safe place in which to conduct banking business will remain necessary for full financial inclusion to succeed.

The Business Case for Branchless Banking: What’s Missing?

Posted on by Parul Tandon

We are in the process of reinventing how these people send and receive money in remote locations, how they pay bills and loans. How they save and insure against emergencies, and for increasing numbers, how they enjoy greater freedom and control over their financial future.

The dilemma is how to make all these new ways of banking—by mobile phone, via card readers and enhanced ATMs, and with third-party agents who act on behalf of branch staff—either profitable or at least sustainable. Every other industry has had to revise how they make money in new markets with new technology. Banking may finally be forced to as well. There may be no traditional “business case” for financial inclusion. The scope and needs of these customers are too different. This reality may ultimately persuade banks to share risks, and rewards, with MNOs and—watch this space—the post office, global consumer brands, and technology service providers. Each brings new value and possible solutions that banks alone cannot solve.

BancoSol: How to Become a Leader in Deposit Mobilization Part 4

Posted on by MSC

In this video series-4, Kurt Koenigsfest, CEO of BancoSol, Bolivia, talks about the challenges they faced in the beginning. He mentions liquidity was a major issue. So, to promote savings the bank chose a mix of staff from both savings and lending background. He further describes the four key success factors that are critically important for any MFI that wants to engage in savings mobilisation. He talks about BancoSol’s experience with introducing a savings-based organisational culture and how appropriate incentives are helping staff to focus on savings.

Failures in Microfinance Lessons Learned 2

Posted on by MSC

“In this video series-2 Alex Silva, a microfinance pioneer, explain in detail the major reasons for the failure of microfinance institutions – an important topic that – so far- has not been talked about. Without doubt, practitioners from around the world stand to benefit from this seminal study of Latin American MFIs. Explaining these failings, Alex talks about the methodological flaws in the credit technology. He says many times microfinance entrants particularly bank mistakenly assume microfinance market is similar to the other areas they are operating.

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Failures in Microfinance Lessons Learned 3

Posted on by MSC

In this video series-3, Alex Silva, a microfinance pioneer, summarises the details of the study of MFI failures, gives important recommendations for MFI sponsors, managers, and funders, such as: recognise microfinance as financial intermediation, focus on risk management systems, and create good corporate governance. Detailing on the specific conclusions of the study, Alex recommends donors or funders should not over supply the funds for rapid growth of MFIs. Similarly, he focuses on microfinance institutions must be very careful on dealing with risk including operational risk, systematic risk etc. Further, he emphasises good regulatory and governance body for microfinance.

BancoSol: Latin America’s First Commercial Microfinance Bank Part 3

Posted on by MSC

In this video, CEO Kurt Koenigsfest talks about the unique positioning of BancoSol, Latin America’s and the world’s first bank fully dedicated to microfinance, how it evolved and become a role model for the industry. He outlines the challenges of transformation and how BancoSol became a leader in deposit mobilisation. Kurt further highlights the role of management in putting a relentless focus on the design of new and adequate products for BancoSol’s customers.