Strategies for Banking The Unbanked

Content

• Chapter
• Contents
• Executive Summary
• Chapter 1: Introduction
  • Who are the unbanked?
  • Market size
  • Formal versus informal financial institutions
  • Why are people unbanked?
  • Drivers of change
  • The business case for banking the unbanked
• Chapter 2: Str ategies and Best Practices
  • Product strategies
  • Designing products for the unbanked
  • Gateway products
  • Distribution strategies
  • Branch channels
  • Technology channels
  • Third-party distribution channels
  • Marketing and customer relationship strategies
  • Market segmentation
  • Gathering market information
  • Customer relations
  • Institution-wide commitment
  • Financial education
  • Simple and transparent product information
  • Marketing channels
  • Credit risk strategies
  • Managing repayments
  • Diversification
  • Alternative credit scores
  • Relationship lending
  • Group lending
  • Building a credit history
  • Financial education
  • Collateral and guarantees
  • Alternative proof of income
• Chapter 3: The United Kingdom
  • Number and profile of the unbanked population
  • Reasons for financial exclusion
  • Initiatives to bank the unbanked
  • Financial Inclusion Taskforce
  • Access to banking
  • Access to affordable credit
  • Access to financial education and money advice
  • Case Study Barclays Bank
• Chapter 4: The United States
  • Number and profile of the unbanked population
  • The low income segment
  • Financial services used by the unbanked
  • Reasons for financial exclusion
  • Initiatives to bank the unbanked
  • Basic accounts
  • Community development initiatives
  • Financial education
  • Targeting the Hispanic population
  • Case study El Banco De Nuestra Comunidad
  • Gateway products in the US market
  • Remittances
  • Cheque cashing
  • Payday loans
  • Stored value cards
  • Home loans
  • Distribution channels in the US market
  • In-store branches
  • Workplace branches
  • Branches in schools
  • Mobile branches
  • Self-service kiosks
  • Shared branching in credit unions
  • Partnerships between banks and community-based organisations
  • Affinity programmes
• Chapter 5: Australia
  • Number and profile of unbanked population
  • Reasons for financial exclusion
  • Financial services used by the unbanked
  • Financial services needs of the financially excluded
  • Initiatives to bank the unbanked
  • Government policies and programmes
  • Banks' initiatives to bank the unbanked
  • Case Study ANZ Bank
• Chapter 6: South Africa
  • Number and profile of the unbanked population
  • Financial services used by the unbanked population
  • Remittances
  • Reasons for financial exclusion
  • Initiatives to bank the unbanked
  • Financial Sector Charter 2003
  • Mzansi account
  • Non-branch distribution channels
  • Mobile banking
  • Case Study Wizzit Bank
  • Financial education
  • New banking framework dedicated and co-operative banks bills
• Chapter 7: India
  • Number and profile of unbanked population
  • Reasons for financial exclusion
  • Initiatives to bank the unbanked
  • Extending outreach into rural areas
  • Government bank branching policies
  • Nonbranch distribution channels
  • Basic accounts
  • Access to credit
  • Financial education
  • Case study ICICI Bank
• Chapter 8: Russia
  • Number and profile of unbanked population
  • Reasons for financial exclusion
  • Initiatives to bank the unbanked
  • Government policies
  • Bank initiatives
  • Financial education
• Chapter 9: Brazil
  • Number and profile of unbanked population
  • Reasons for financial exclusion
  • Initiatives for banking the unbanked
  • Correspondent banking
  • Basic accounts
  • Access to credit
  • Electronic welfare payments
• Chapter 10: Mexico
  • Number and profile of the unbanked population
  • Financial services used by the unbanked population
  • Reasons for financial exclusion
  • Initiatives to bank the unbanked
  • Popular Savings and Credit Act (2001)
  • BANSEFI and L@Red de la Gente
  • The Rural Microfinance Technical Assistance Project
  • Using remittances to bank the unbanked
  • Mexico's retailer banks
  • Electronic banking initiatives
  • Prepaid cards
  • Payroll cards
  • Case Study Banamex
• Chapter 11: Conclusion
  • Product strategies
  • Distribution strategies
  • Marketing and customer relations strategies
  • Credit risk strategies
  • The UK
  • The US
  • Australia
  • South Africa
  • India
  • Russia
  • Brazil
  • Mexico
• TABLES
  • Table 1.1: Percentage of unbanked population in selected countries, 1998-2006
  • Table 1.2: Reasons for being unbanked in selected countries, 1997
  • Table 2.1: Technology used by financial institutions to serve low income customers, 2006
  • Table 2.2: Services offered via technology channels, 2006
  • Table 2.3: Reasons financial institutions use technology channels, 2006
  • Table 2.4: Regional share of mobile phone subscriber growth, 2005-06
  • Table 2.5: Usage of post offices for financial services by region, 2006
  • Table 2.6: US employers providing financial benefits to employees, 2005
  • Table 2.7: Characteristics of basic bank account literature and application forms targeting the unbanked
  • Table 2.8: How services are marketed to the unbanked, 2006
  • Table 2.9: Advertising media used by microfinance institutions in Europe, 2004
  • Table 2.10: Cross-selling potential as unbanked become banked
  • Table 3.1: Growth in new Post Office accessible accounts, April 2003-March 2006
  • Table 3.2: Child Trust Fund: accounts opened by region, December 2006
  • Table 3.3: Barclays Bank: personal customers in deprived areas of the UK1
  • Table 4.1: Percentage of unbanked by ethnic group in the US, 2002
  • Table 4.2: Demographics of unbanked consumers in the US, 2006
  • Table 4.3: Income of banked and unbanked who save regularly in New York and Los Angeles, 1998
  • Table 4.4: Financial behaviour of banked and unbanked consumers in New York and Los Angeles, 1998
  • Table 4.5: Where the unbanked have looked for credit in the past three years, 1998
  • Table 4.6: Reasons for not using banks, lower-income urban US households, 1997
  • Table 4.7: Reasons for Hispanics being unbanked, Garden City, Kansas, 2005
  • Table 4.8: Location of New York City cheque cashing outlets in relation to bank branches, 1995
  • Table 4.9: El Banco de Nuestra Comunidad branch, membership and account growth, 2001-05
  • Table 4.10: Method of remitting money from US to Latin America, 2005
  • Table 4.11: US unbanked and total consumers planning to purchase homes, 2006
  • Table 4.12: Home mortgage loan products targeting the un(der)banked in the US, 2005
  • Table 4.13: Reaction to in-store branch concepts, 2005
  • Table 4.14: Department stores where unbanked consumers had shopped in the previous 30 days, 2006
  • Table 4.15: Growth in Indiana credit unions in shared branching versus credit unions not in shared branching, 2000-06
  • Table 5.1: Ownership of various financial products in Australia, 2004
  • Table 5.2: Number and location of bank branches and agencies in Australia, 1990-2000
  • Table 5.3: Most important unmet needs of the financially excluded, Australia, 2004
  • Table 6.1: Financial services measure summaries, 2006
  • Table 6.2: Percentage of the adult population using formal financial services, 2005-06
  • Table 6.3: Percentage of consumers who are banked, previously banked or never banked, 2004-06
  • Table 6.4: Reasons for wanting a bank account, 2006
  • Table 6.5: Banking products used by South Africans by race, 2006
  • Table 6.6: South African consumers' transactional behaviour, 2006
  • Table 6.7: How South Africans fund retail purchases, 2006
  • Table 6.8: Estimated volume of interntional remittances via existing channels in SADC, 2005
  • Table 6.9: Cost of sending remittances via existing channels in SADC, 2005
  • Table 6.10: South African consumers' reasons for not having a bank account, 2006
  • Table 6.11: South African consumers' reasons for not having a Mzansi account, 2006
  • Table 6.12: South African consumers' reasons for not having life insurance, 2006
  • Table 6.13: South African consumers' reasons for not having short-term insurance, 2006
  • Table 6.14: South African consumers' reasons for not having funeral cover, 2006
  • Table 6.15: South African consumers' travel time to the nearest bank, 2006
  • Table 6.16: Preferred financial services providers, 2006
  • Table 6.17: South African consumers' perceptions of banks by income, 2006
  • Table 6.18: South African consumers who agree with the statement "You can easily live your life without a bank account", 2006
  • Table 6.19: Market shares of Mzansi account providers, 31 March 2006
  • Table 6.20: Views of m-banking among South African consumers, 2006
  • Table 6.21: Cost of using a Wizzit versus traditional bank account or Mzansi account, 2005-06
  • Table 6.22: Average number of transactions conducted by Wizzit users, 2005-06
  • Table 6.23: Key demographic indicators for Wizzit users, 2005-06 Table 6.24: South African consumers' nowledge of financial services terms, 2004
  • Table 6.25: South African consumers' desire for financial knowledge, 2006
  • Table 7.1: Number of deposit and credit accounts in scheduled commercial banks, 1981-2005
  • Table 7.2: Regional level indicators of scheduled commercial banks, 1991-2005
  • Table 7.3: Distribution of commercial bank branches in India, June 2006
  • Table 7.4: Kisan credit cards issued in India by state, 31 March 2006
  • Table 8.1: Banking services/products used by Russian consumers, 2006
  • Table 8.2: Perceptions of savings reliability, 2006
  • Table 8.3: Growth of consumer lending in Russia, 2000-06
  • Table 9.1: Number of simplified accounts in selected banks, 2006
  • Table 9.2: Transactions made at Banco Postal, 2004-05
  • Table 9.3: Number of Banco Postal branches, 2002-05
  • Table 9.4: Microcredit provided by major banks, 2003-05
  • Table 10.1: Characteristics of unbanked and bank households in Mexico City, 2002
  • Table 10.2: Formal and informal savings of banked and unbanked consumers in Mexico City, 2002
  • Table 10.3: Methods of saving in rural Mexico, 2000
  • Table 10.4: Ways of receiving income for consumers in Mexico City, 2002
  • Table 10.5: Means of converting cheques for consumers in Mexico City, 2002
  • Table 10.6: Means of paying bills for consumers in Mexico City, 2002
  • Table 10.7: Sources of credit for consumers in Mexico City, 2002
  • Table 10.8: Why the unbanked in Mexico City have not attempted to open a bank account, 2002
  • Table 10.9: Number of people per financial institution branch in Mexico by state, 2006
  • Table 10.10: Inhabitants per branch, Distrito Federal and Chiapas, 2006
  • Table 10.11: Why unbanked in Mexico City who attempted to open a bank account could not do so, 2002
  • Table 10.12: Reason Mexico City consumers have not applied for credit, 2002
• FIGURES
  • Figure 1.1: Summary of financial access, using ratio of deposit accounts to cash in the money supply as measure, 2006
  • Figure 1.2: The continuum of financial service providers
  • Figure 1.3: Relationship between being banked and selected socio-economic indicators
  • Figure 1.4: Relationship between GDP and the number of banked in selected countries, 2004
  • Figure 1.5: Top performing microfinance institutions versus most profitable banks in selected countries, FY2002
  • Figure 1.6: Comparison between over 30-day at risk portfolios in the Bolivian banking sector and MicroRate's Bolivian MFIs, 1999-2003
  • Figure 2.1: Transaction costs per distribution channel for US banks, 2006
  • Figure 2.2: Requirements for moving forward with programmes to bank the unbanked
  • Figure 2.3 Overview of marketing techniques used in FIELD study
  • Figure 2.4 Summary of CDFI marketing approaches
  • Figure 3.1: Main categories of people without an account in the UK, 2000
  • Figure 4.1: Unbanked Hispanics' time in US compared to all Hispanics by index, 2006
  • Figure 4.2: Age distribution of total consumers, unbanked consumers and unbanked Hispanic consumers, 2006
  • Figure 4.3: Products and services offered to under-banked consumers, 2006
  • Figure 5.1: Exclusion curves for transaction/savings/investment products, 2004
  • Figure 5.2: Exclusion curves for credit/loan products, 2004
  • Figure 5.3: Exclusion curves for insurance products, 2004
  • Figure 6.1: Population distribution according to Financial Services Measure, 2004-06
  • Figure 6.2: South Africans' growth in banking status
  • Figure 6.3: Means of making domestic money transfers in South Africa, 2006
  • Figure 6.4: Consumers' use of public transport to get the nearest bank, 2006
  • Figure 6.5: South African consumers' perception of financial services providers, 2006
  • Figure 6.6: Awareness of the Mzansi account among South African consumers, 2006
  • Figure 6.7: South African consumers' sources of financial advice, 2006
  • Figure 10.1: Correlation between level of marginalisation and number of persons per financial institutions branch in Mexico by state, 2006