The Economics of Branchless Banking
This paper offers a vision for constructing banking infrastructure that is commercially viable, safe and trusted, and accessible to all. It states that financial markets are failing to meet the needs of the poor, especially those living in rural areas in an affordable, convenient and safe way, and examines the growing interest in branchless banking in many parts of the world. The paper lists the economic drivers of branchless banking and the different models that have emerged using an agent network. Five main types of services offered by branchless banking are:
- Person-to-person remittances;
- Person-to-business such as utilities, taxes and credit card bills, and government-to-person such as welfare payments;
- E-commerce;
- Banking services like savings and credit;
- In-store payments.
The paper states that branchless banking should not be viewed merely as an adaptation of technology by firms to expand profitably into unserved markets. Instead, it offers potential to develop new value chain structures based on specialization and scale to provide financial services to poor people.
