Serving Depositors - Branch Infrastructure

A key challenge for financial institutions serving the low-income market is how to optimize branch networks to serve high volumes of depositors to provide high quality financial services at a low unit cost. The branch is one of the most critical components of any savings product simply because it is so central to many aspects of delivering savings services. Products are usually delivered through a branch network. The extent, type and nature of the branch network sets operating cost parameters that must be covered through charging appropriate prices. The majority of staff is located within branches. Promotions occur through the branch network where customers and staff meet. The branch provides the clearest evidence of institutional stability: a strong corporate brand evidenced at branch level positively influences the position of the institution in the customer's mind, driving positive word of mouth. This Briefing Note examines' important factors microfinance institutions must consider when determining their branch structure and locations including:

• Delivery strategy;
• Branch location;
• Appropriate premises - regulatory requirements;
• Customer communications.