CGAP Country-Level Savings Assessment: Bosnia & Herzegovina

This report discusses the Savings Initiative developed by CGAP in Bosnia-Herzegovina. It identifies its following features:

• Goals:
  • To gather and disseminate knowledge about small-balance savings mobilization;
  • To analyze the constraints and opportunities at country level.
• Methodology:
  • Analysis of the financial system at the micro, meso and macro levels;
  • Interviews;
  • Focus group discussions with microfinance credit organizations (MCOs).

The report finds that:

• Not all the money is in the banks;
• Bank deposits are high when compared to neighbouring countries;
• An estimated 50% of the money entering the country moves through informal channels;
• A definite demand for bank accounts exists.

The report identifies the following challenges in reaching the unbanked:

• At the client level-lack of trust and financial education;
• At the institutional level-lack of:
  • Physical access,
  • Appropriate products for small-balance depositors,
  • Customer service.
• At the meso level-lack of:
  • Local resources for training and technical assistance,
  • Financial infrastructure.
• Weakness at the policy level.

The report recommends the following areas for exploration:

• Financial education, which focuses on savings, for low-income clients;
• Market research to understand the needs of low-income people;
• Development of products and services for the low-income market;
• Expansion of the e-payment infrastructure;
• Policy dialogue between policy makers and MCOs.