This is the fourth post in a series about product innovation in branchless banking. In the last post we threw the focus on direct observation of consumers to source deep insights that lead to better products. We also released our detailed analysis. Today’s post describes a second key feature of the three Product Labs which will be established by CGAP’s bank, telco and other partners.

Let’s say you are a manager who has bought into developing products beyond the standard liquid wallet and P2P functionality ubiquitous in branchless banking. You want to innovate. Then you run smack into the existing biases, procedures, and requirements of your own company.

If you are not careful, your good ideas will die a slow death of endless internal analysis or be outright rejected because “the data’s just not there”. As one manager told us about his company, “This place is run by accountants. If you don’t have the data, you go nowhere.” How can you feed the beast and move forward rapidly to approval?

This is the question confronting senior managers CGAP interviewed at more than a dozen firms that ...

Recently, the CGAP Microfinance Blog hosted a series on the role that public funders can play to promote branchless banking. The series was launched in conjunction with a new CGAP Focus Note that highlights emerging lessons from public funders in this space. Regular readers of this blog are very familiar with the excitement around branchless banking and are probably aware that branchless banking is primarily being driven by the private sector. In fact, private investors have provided about 80% of the estimated $400 million in debt/equity investment in the sector. However, public funders are eager to use their resources to help bring branchless banking to more and more countries. Given the current momentum, is there a meaningful role that public funders can play without crowding out private investment?

The new Focus Note and series attempt to answer this question. We spoke with public funders that have already been active in this space and developed case studies to understand what role they played and why. We found that public funders can play an important and additive role in developing branchless banking services. However, they should ensure that their involvement includes one or more of ...

This is the first post in a five-part series about product innovation in branchless banking.

The promise of branchless banking is increased access to finance for the poor and new revenues for providers of all stripes. That’s not happening yet.

CGAP counted 22 branchless banking services with more than 1 million registered users; we also counted more than 70 others which have not reached that threshold (as of Q1 2011). That’s about a 1 in 4 “hit rate”. If we look at services which have launched since 2007 (i.e. since M-PESA got everyone excited) and acquired more than 250,000 active users (a better indicator of traction in the market than registrations), success rate drops to 1 in 15. Not so hot.

This might just be the growing pains of firms still figuring out how to operate in this new space at the intersect of several industries (mobile, banking). Some providers have fallen into regulatory ruts, some are finding it hard to build robust agent networks, while still others are struggling to make technology platforms stable (often wrestling with vendors who provided them in the first place). In short, there is a ...

As regular readers of this blog will know, we  are excited about the developments that we’re seeing in branchless banking in Pakistan, which have led us to call it a “laboratory” for innovation. Most recently I interviewed Mansoor Hassan Siddiqui, the Director for Banking Policy and Regulations at the State Bank of Pakistan about the recent changes to the Branchless Banking Regulations that, among other things, removed the need to capture biometric information at the time of account opening.

These changes to the regulation seem to have unleashed yet more activity. Easypaisa, the longest-established service in the market launched by Tameer Microfinance Bank and their parent company, mobile network operator Telenor, now claims over half a million mobile accounts following a major campaign. The mobile account will complement their over-the-counter bill payment and domestic money transfer services which together have processed a total of Rs 43 billion (US$500 million).

The other major player in the market is UBL, which launched their Omni service in April last year, only six months after easypaisa’s debut. UBL is supporting a number of government and NGO programs in the distribution of cash transfers to nearly two million beneficiaries through their ...

Chrissy Martin is currently a Senior Consultant at MEDA. Previously, she worked for 12 months as the Product Manager for Digicel in Haiti, which has rolled out a mobile money service called TchoTcho Mobile. Through both Digicel and MEDA, Chrissy has worked with several NGOs that are interested in mobile money services to make payments to beneficiaries of cash-for-work programs. She outlines some of practical challenges that have to be overcome to make this a reality.

Mobile Money in Haiti

There are many reasons to be excited about mobile phones as a way to distribute cash transfers, such as government payments or NGO cash-for-work programs. First, cash transfers are often sent to groups of people in multiple locations, and it can be easier to reach them via mobile than to bring them together in one place. It is also easier to track payments if they are sent electronically, which can reduce corruption and increase confidence that the right amount of money ends up with the right individuals. A third possible benefit is that relying on a network of mobile money agents who already handle cash will ...

Summer is now officially over here in Washington and the busy fall season is off to a quick start. If you are just getting back into high gear, maybe this is a good time for us to recap some of the things we’ve been discussing on the blog over the last couple months, some of the latest news that’s caught our attention, and some things to keep your eye on in the coming weeks.

The South African bank FNB has recently launched its latest mobile banking offering Pay2Cell which allows FNB account holders to make payments to other FNB clients using only the recipient’s mobile phone number. This is a different product offering from FNB’s eWallet which allows FNB account holders to send money to anybody with a mobile phone. The recipient does not need a bank account and can withdraw the cash at any FNB ATM.

South Africa is one of the 7 markets that we covered in our recently released branchless banking country notes. The other countries include India, Pakistan, Mexico, Brazil, Ghana, and WAEMU in West Africa. The report for WAEMU is now also available in French – la version en français UEMOA.

An active ...

On a recent visit to Bangladesh Sarah Rotman and I met with Post Office Director General, Mobasherur Rahman, at his office in the middle of busy downtown Dhaka to hear about his foray into the world of branchless banking.

Rahman escorts us through winding corridors, deep into the heart of the Bangladesh Post Office headquarters, to a room unlike any other in the enormous building. Outside an innocuous looking door are about twenty pairs of shoes watched over by a small security camera. We were politely asked to remove our shoes and were shown into the room.

The Post Office now offers two branchless banking services. The longest established service, which was launched in March 2010, is the Electronic Money Transfer Service (EMTS) which allows customers to instantly send money from one branch to a friend or relative who can pick up the funds at 2,000 of the 10,000 post office branches. EMTS, it is envisaged, will soon replace the traditional money order. Post office staff use either a web interface, for those with internet connectivity, or a menu on a specially equipped mobile phone to key in information about the sender and receiver. There is also an option ...

This is a guest blog by Greta Greathouse, Chief of Party for the USAID-funded Haiti Integrated Finance for Value Chains and Enterprises project (HIFIVE).

Voila and Unibank receive the second "First to Market" Award for Ti-Cash

Just seven months ago on January 11, CGAP reported that HIFIVE and the Haiti Mobile Money Initiative (HMMI) awarded Digicel  and its partner bank Scotiabank, its “First to Market” Award of $2.5 million for “Tcho Tcho Mobile”. It was a very positive piece of news just prior to the ceremonies one day later marking the first anniversary of the earthquake that hit Port au Prince. Established in June 2010 as part of a longer term response to the disaster in an effort to establish long term financial services for all Haitians, HMMI was created by the Bill & Melinda Gates Foundation in partnership with USAID. HMMI, implemented by the USAID project HIFIVE, provides incentives to encourage mobile operators and financial institutions to launch mobile money services.

Here is a follow up on how that legacy is developing. On July 5 HIFIVE awarded mobile operator Voila and ...

In this third post in the series on Brazil, we discuss another recurring issue about the agent business in Brazil. Read our first two posts on Brazil here.

In a country where agents have existed for close to 10 years nationwide, we would expect that by now banks would have found business reasons to share agents. From a consumer perspective, it is clearly attractive to be able to access banking services for multiple providers at a single agent. Yet agents in Brazil are still exclusive to banks and branded exclusively. Regulation in some markets requires agent exclusivity, but that is not the case in Brazil which makes this largely a business decision. After all these years, why hasn’t it made business sense to banks to share agents? Why haven’t retailers and agent companies struck partnerships with multiple banks and been more aggressive as they have in Mexico?

Does the new Elo brand indicate future plans to share agent networks?

It is important to note that there is already “sharing” of agents at some level. Credit agents are already shared between ...

This is a guest blog by Loretta Michaels, an independent consultant who has worked on mobile money implementations in Afghanistan and Haiti, among other places.   

A mobile money user in Afghanistan

As everyone who reads this blog knows, there’s been a great deal of excitement over the last few years regarding the potential for mobile money to solve a host of development problems. And as we’ve all learned over that same period of time, it’s not as easy as it looks, or at least as easy as Kenya made it look. Countries like Afghanistan, Iraq, Haiti, the Democratic Republic of the Congo, even the newly minted South Sudan are all experimenting with or thinking about mobile money implementations. In addition to the normal issues and challenges facing policymakers and service providers, post-conflict and post-disaster countries face additional problems that merely serve to exacerbate the overall challenges with mobile money.

Skilled resources are scarce commodities in a post-conflict region. Finding experienced staff that can implement and/or regulate mobile money services is hard enough in most places, but finding those people and convincing them to go live and work ...