For Financial Inclusion Week 2017, WSBI highlights the ways that new partnerships and new products are helping its members make progress toward financial inclusion.
> Posted by Mina Zhang, Senior Advisor, WSBI
The World Savings and Retail Banking Institute (WSBI) and its members are committed to Universal Financial Access (UFA), doing their part to help realize the “account for everyone” goal. Our data from the end of 2016 shows that we’re making progress, with 136 million new clients and 236 million new transaction accounts, since the UFA benchmarks were set at the end of 2014.
For Financial Inclusion Week 2017, we are highlighting the ways that new partnerships and new products are helping us achieve this goal.
WSBI members that harness new technologies have made real inroads. They have been able to more effectively offer affordable, quality products and services that meet the needs of underserved and unbanked people, allowing them to boost financial access and usage and attract new customers. In a nutshell, WSBI members’ approaches to financial inclusion include:
- Integrating the unbanked at the start of financial inclusion journey
- Extending banking networks to underserved areas
- Digitizing savings mobilization and financial service to meet the changing needs of customers
- Improving financial literacy, particularly among youth
Integrating the Unbanked at the Start of the Financial Inclusion Journey
ViVet app screen. Photo credit: WSBI
LienViet Postbank (LVPB) Vietnam is top among the WSBI membership in Asia in new accounts. The number of accounts has almost doubled from 2014 to 2016. This achievement is thanks to its innovative approach to integrate the unbanked at the start of financial inclusion journey.
ViViet is LVPB’s payment solution that provides access to payment and banking services via mobile phones for customers in Vietnam. Only 22 percent of the population has access to formal banking services in Vietnam, but around 90 percent of Vietnamese adults are using mobile phones, and the mobile phone subscription rate is 128 percent. The wide gap between banking customers and telecommunication subscribers implies significant potential for the ViViet e-wallet.
ViViet is tailored to the needs of the unbanked because it can grow with users as their financial journey expands. They may start with bill payment, then open a bank account, access a microloan, and so on. ViViet currently serves as a payment tool for services including utility bills, transportation, mobile phone cards and air-time top-ups. ViViet can also be used for payment of loans, insurance premiums, tuition fees and online purchases, as well as fund transfers between ViViet and external bank accounts.
Extending Banking Networks to Underserved Areas
NSB i-Saver outlet in Sri Lanka. Photo credit: WSBI
There are about 6 million smartphones in Sri Lanka, and today a smartphone or computer device can easily be converted into a virtual bank. NSB i-Saver allows customers in Sri Lanka to deposit money in any NSB Bank account in a convenient and efficient manner via more than 16,000 touch points throughout the country, as a result of partnerships with the mobile network operator and other retailers. This expansion of service is expected to further inculcate the habit of savings among Sri Lanka’s populace, thus resulting in wealth creation and mobility of funds for investment.
Similarly in El Salvador, Fede Puntos Vecinos (Fedecredito’s agent banking scheme) has increased access to financial services in underserved areas. To date, service stations have been implemented in 196 of 262 municipalities in El Salvador—that means one service point for every 20 kilometers. As of December 2016, Fede Puntos Vecinos processed 5.4 million transactions valued at some US $195 million, with an average transaction amount of around US $35.
As one example, through the Fede Puntos Vecinos business model, mini-market owner Carlos Armando Barillas increased sales and broadened offerings at his initial store (opening a new bookshop section) and opened a new brand new store in another municipality.
Digitizing Youth Savings and Improving Financial Literacy
PostBank Uganda YouthSave event. Photo credit: WSBI
PostBank Uganda unveiled a goal-based mobile savings product called the PostBank Youthsave Solution to encourage youth to save more diligently. This product aims to improve the financial inclusion of youth through educating them about saving money. It also aims to retain them as loyal customers and ultimately position PostBank as the preferred financial institution for young people. YouthSave was developed with support of the WSBI, which supported the research into youth and student behavior and gaps that affected the saving culture. The research confirmed that young people have access to and prefer digital platforms like mobile phones and the Internet.
The YouthSave account enables youth to access their accounts digitally, as well as learn how to save for multiple goals using a mobile phone application. Its functionality includes setting and tracking savings goals, setting start and end dates for savings goals, editing savings goals, checking the account balance, buying airtime, paying bills, and transferring money. This digitally-enhanced product is available to students and youth between 18 and 30 years old.
These challenges and questions make our work in financial inclusion even more pressing. If we address them well, we can expect more people joining into the financial mainstream.