This Focus Note evaluates the evidence from 18 branchless banking providers with a collective total of more than 50 million customers (see Table 1) to answer three questions:
- Does branchless banking reach large numbers of low-income and unbanked clients?
- Are prices for branchless banking lower than prices for traditional banking for the kinds of transactions low-income and unbanked people want to do?
- What other services do these customers want from branchless banking?
The answers to these questions have implications for the business case, customers, and those who hope that branchless banking can boost financial inclusion.
The data offer some answers. On the question of scale, branchless banking can reach large numbers of the unbanked relatively quickly. CGAP looked at the outreach of eight providers globally for which good data were available by drawing on 13 studies that surveyed 16,708 branchless banking clients. The eight providers average 3.73 million active registered users, of which 37 percent or 1.39 million were previously unbanked.Five of the providers reach more previously unbanked clients than the largest microfinance institution (MFI) in the provider’s country—on average, 79 percent more.
These five branchless banking providers grew quickly, surpassing the largest MFI in number of customers within three years. This is not to suggest branchless banking is replacing or eclipsing MFIs. The services branchless banking typically provides (payments) are complimentary to MFI microloans: both meet a widespread need for which clients are willing to pay.
This Focus Note evaluates the evidence from 18 branchless banking providers with a collective total of more than 50 million customers (see Table 1) to answer three questions:
- Does branchless banking reach large numbers of low-income and unbanked clients?
- Are prices for branchless banking lower than prices for traditional banking for the kinds of transactions low-income and unbanked people want to do?
- What other services do these customers want from branchless banking?
The answers to these questions have implications for the business case, customers, and those who hope that branchless banking can boost financial inclusion.
The data offer some answers. On the question of scale, branchless banking can reach large numbers of the unbanked relatively quickly. CGAP looked at the outreach of eight providers globally for which good data were available by drawing on 13 studies that surveyed 16,708 branchless banking clients. The eight providers average 3.73 million active registered users, of which 37 percent or 1.39 million were previously unbanked.Five of the providers reach more previously unbanked clients than the largest microfinance institution (MFI) in the provider’s country—on average, 79 percent more.
These five branchless banking providers grew quickly, surpassing the largest MFI in number of customers within three years. This is not to suggest branchless banking is replacing or eclipsing MFIs. The services branchless banking typically provides (payments) are complimentary to MFI microloans: both meet a widespread need for which clients are willing to pay.
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