Financial Services for the Urban Poor: South Africa's E Plan

This paper details the recent efforts by E Bank, an affiliate of Bank of South Africa, to provide cost-efficient financial services for the poor.To help clients with electronic basic banking, E Bank combines the innovative technology of modified automated teller machine (ATM) services with staff assistance available.

• The product package includes assistance for transactions, informative receipts, and a welcoming atmosphere in the E branches.
• The ATMs have a simplified screen using graphics to illustrate usage, in addition to text.
• With a fully automated system, E Bank can monitor accounts and reward savings performance.

As per the authors, the market performance of E Plan has been characterized by rapid growth in accounts and account balances. Several issues stand out as critical for the success of the basic electronic banking design of E Plan. These include:

• The innovative approach taken to develop and continue the improvement of the system,
• The technological infrastructure and capabilities,
• The characteristics of the market that allowed the program to establish and expand the client base quickly.

The paper concludes that:

• Market research and experience support the design of E Plan, and demonstrate how a commercial bank can use market information to bundle services for low income clients.
• The most essential ingredient of the plan was its focus on demand enhancement.
• Even low balance customer can be profitable for banks.