Banking Rollout Approaches to Rural Markets

This paper examines strategies for expanding microfinance bank operations to a rural setting based on the experience of Opportunity International Bank of Malawi (OIBM). The paper is useful for microfinance practitioners that assist in the formulation and execution of new outreach strategies to rural clients.

OIBM serves the poor directly through savings, microcredit, and insurance, and indirectly through partnerships with organizations that serve the targeted clients. A majority of the target population lives in rural areas. OIBM has developed a combination of delivery channels to maximize reach while minimizing cost. OIBM's delivery channels include static and mobile units, ATMs, Point of Sale (POS) devices and smart cards with biometric identification.

The paper presents insights and challenges that OIBM faces in the implementation of its outreach strategy. It focuses on the following learning:

• Client responsive product modification;
• New and/or unconventional marketing and product education activities;
• Use of technology and other existing distribution channels to create a virtual organization;
• Phased rollout involving careful, sequential steps to build business before commencing operations.