Branchless Banking Update: Should We Bank on Phones or The Post?

This MicroSave Briefing Note examines the role that the post office can possibly play in financial inclusion. Banks continue to be the most important actors in government attempts at financial inclusion, but are unwilling to rethink their business plans to better accommodate low income customers. Meanwhile, the ever increasing participants who are interested in entering the branchless banking space do not have the deposit insurance necessary to protect customers. A couple of initiatives are attempting to restructure postal networks to enable them to improve financial access for the poor in rural areas already served by post offices. The paper states that:

• Post offices offer both branches and banking;
• People without bank accounts or with inconvenient dormant accounts, might open and more actively use postal accounts if they offer full banking services;
• Post office may inspire more trust than mobile operators, technology providers, or vendors of soft drinks and snacks.

It concludes that, for the present, a full banking license and a safe place to conduct banking business are necessary for financial inclusion to succeed. The safekeeping of money requires a level of security and confidence that most depositors only accord to banks.