A substantial proportion of the Kenyan population is using M-PESA as an addition to bank savings accounts, and less frequently, as a full-scale substitute. The worry among financial inclusion proponents and banks is that poor people will use M-PESA as a substitute for formal institutions. The Note examines progress towards financial inclusion in Kenya, and concludes that while M-PESA’s rails offer the potential, Kenya may yet have to wait to realise comprehensive, commercially sound, affordable and effective financial inclusion.
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Clients’ Willingness to Pay “Reasonable Fee” for BC Services
This Note discusses whether end customers are willing to pay for financial services delivered by Business Correspondents, and if yes, how much are they willing to pay. It concludes that the majority of customers are willing to pay a fee for a convenient banking facility close to their homes. The service, however, has to offer a range of products suiting to their needs. The note gives insight into factors and mechanisms that could guide the decision on the fee to be charged. It provides a backdrop for service providers to start with what can be termed as a ‘reasonable’ fee; and once again, clearly highlights the importance of listening to clients.
What Do Clients Want in E/M-Banking Agents?
This Note describes clients’ preferences for desired agent profiles in India, and looks at how this data could be used when selecting agents. It concludes that agent selection must consider many aspects key to the viability of the business, such as the capacity to scale up and the ability to manage cash. However, client preferences for agent attributes are perhaps more important than other considerations, since these will be one of the main factors driving transactions. Organisations wanting to adopt agency banking models should take cognisance of this and exercise adequate due diligence in identifying key characteristics that clients desire and selecting agents according to those traits.
Riding the M-PESA Rails: Advantages & Disadvantages
By riding on M-PESA rails, most banks, MFIs and Deposit Taking Microfinance Programs (DTMs) are looking for cost reduction, increased staff efficiency and convenience of customers, which ultimately should lead to more deposits/transactions. This Note examines if, how and where financial institutions are realising the potential of M-PESA to make their systems more efficient and their products more accessible. It concludes that financial institutions that have agreements with M-PESA are not heavily promoting the opportunity, despite the potential benefits. They are aware of the issues faced by customers as well as the back-end challenges of reconciliation and so on, and are thus cautious about large-scale rollout.
No Thrills – Dormancy in NFA Accounts
Successful Banking Correspondents Need a Compelling Product Mix
To date, the business case for BCs remains uncertain, despite the Reserve Bank of India’s (RBI’s) efforts to relax policy to encourage successful growth of BCs. Nonetheless some commentators do still see the future of financial inclusion and microfinance in India dependent on successful BC models. This Note lays out why a compelling product mix is central to a successful BC network. A client-responsive product mix is likely to create the level of activity necessary to make the BC channel sustainable for both banks and the BC network manager, as well as for individual BCs themselves … thus creating true and meaningful financial inclusion.