Postal Financial Inclusion

The financial inclusion community has been focusing on branchless banking over mobile without considering existing infrastructure like the Post. Today we highlight a brief from Microsave that asks whether we should be using phones or a physical network that already exists: the Post.

At the end of the document, the author states: “Given a choice, those currently without bank accounts, or with inconvenient dormant accounts, might open and more actively use postal accounts if the post office were close by and able to offer full banking services.”

Read the complete paper Branchless Banking Update: Should We Bank on Phones or The Post?

New Delhi, Dec 7 (PTI) Over 1 lakh branch post offices will be equipped with IT infrastructure by 2012-13, Parliament was informed today. “About 24,015 departmental post offices have been supplied with computer hardware. The remaining 1,279 departmental post offices and 1,29,497 branch post office of the Department would be equipped with Information Technology infrastructure under ”India Post Technology Project-2012” by 2012-13,” Minister of State for Communications and IT Sachin Pilot said. There were 1,54,866 post offices in the country at the end of March 31, 2011, of which 24,015 are computerised and 12,202 have Internet connectivity, Pilot said in a written reply to Lok Sabha. In reply to another question, he said there were 98 Telegraph offices in the country as on November 30, 2011 and all of them are working on modern technology — WTMS (Web Based Telegraph Messaging System). To yet another question, Pilot said India Post has signed an agreement with the National Stock Exchange on September 26, 2011, for installation of LCD screens in the post offices that is aimed at creation of financial literacy and awareness leading to financial inclusion. “All expenditure, except electricity charges on setting up of LCD screen in post offices, shall be borne by the NSE,” the minister said.

Source: msn news, 08/12/2011

During the last UPU Financial Inclusion Workshop in Bern, a group of stakeholders (Operators of champion countries, Financial Sector Regulating Authorities and Governments, Development Partners, Standards-Setting Bodies and UPU) agreed upon a Roadmap for Postal Financial Inclusion.

The document includes the next steps the initiative should take together with the commitment of the stakeholders in  fostering and deepening this process.

When a video says more than one thousand words. More on our new page covering the 2011 Postal Financial Inclusion Workshop.

Guest contribution by Hans Boon

New initiatives are seen in South America: in Ecuador and Uruguay the Posts have entered into new partnership agreements with banks to mobilize small savings and collect or distribute payments, while Brazil’s ECT Correios has launched the selection process for the strategic partner of Banco Postal.

In Africa the developments in postal financial inclusion are on the fast lane: in Botswana the Post and Savings Bank will merge in summer, in Kenya the Postbank will be incorporated, and the Post looks into new strategies to revamp, in Zambia the Post will help in providing banking to the rural poor, while the South African Postbank prepares for stepping into the business of lending.

Application of innovative ICT technologies supports Pos Indonesia in its money transfer services and in Israel to provide cash inside and outside the post offices.

A hot issue is also expansion of financial services and modernization through private sector participation: in Viet nam through the creation of the Lien Viet Post Bank with the Post being a shareholder, in Kenya through a 44% share of Post in Postbank,in Serbia Posta aims at an increased share in its Postal Savings Bank and in Kazakhstan decisions have been made for a “people’s IPO” of KazPost.

This and other news from  emerging and transition markets  around the world is presented in the 5^th issue of “Post Financial Times”, based on recent news clippings and interviews. Download it here!

Guest contribution by Hans Boon

Next week kicks off with a conference on development of Postal Financial Services  in Burkina Faso’s capital Ouagadougou. Organized by PAPU, the conference brings together operators, investors, regulators and policy makers from more than 60 countries and international institutions. It is a convincing sign that worldwide interest in Postal Financial Inclusion is rapidly increasing.

This is consistent with the news observed in January 2011. New initiatives progress in Algeria [set up of Postbank], Tanzania [Mobile Money partnership], South Africa [Postbank to be licensed and entering competiton] and Albania [all rural post offices broadband connected for on-line payments], India [debit card partnerships] .

Success in competition is demonstrated by Postal banks in Poland [lead positions for micro enterprises and seniors], Czech republic [2^nd most client friendly bank], Bulgaria [best CEO and HR Manager] and Bosnia [attractive to foreign investment].

Perhaps no one really likes to do it: paying taxes. But if needed, the post office appears as the most preferred place in e.g. Indonesia, Russia and Brazil- proximity, long opening hours, trust through simplicity and reliability are key factors in the success.

The issue #  4 of “Post Financial Times” presents more details on the above; much of the news is based on interviews and news clippings from local sources in more than 10 different languages. With more international events on the agenda for 2011 , the news from the “field” signals a rich basis for exchange of experiences and information as an input for international cooperation.

Three decades ago, Tilak Ram was a mere part-time employee at India Post. Technically a Gramin Dak Sevak — an “extra departmental employee” — he has come a long way since. Today, Ram’s spartan office-cum-home in rural Laksar, in the northern state of Uttaranchal, is constantly bustling with people. The 53 year-old Ram is a postal worker outside the regular cadre; there are thousands of them across India. Over the years, he has become the single-point contact for over 6,000 rural households across 12 villages around Laksar to sell mobile phone cards and postal stationery, update post office savings bank accounts, deliver pension money, and collect postal life insurance premiums. Read this insightful article on Wharton’s blog India Knowledge Wharton.

This article also highlights the critical role postal networks can play in distributing microinsurance for poor families, which seems a very promising segment of postal financial inclusion, particularly well-suited to the needs of low-income people. It describes the challenges confronted by India Post in managing multiple partners and how the Post can effectively cooperate and compete with private sector companies.