The global expansion of ‘branchless banking’, including using mobile phones, is inevitable, but there is no certainty that large numbers of poor people without bank accounts will use these alternative channels for financial services beyond payments, such as savings and credit.

Scenarios for Branchless Banking in 2020, a report from CGAP, a microfinance group based at the World Bank, and the Department for International Development (DFID), shows how the poor are kept in poverty when they are financially excluded. They lack safe places to save money, the opportunity to invest in their future, and cannot reduce the risk of their savings being lost in natural disasters. Governments and the private sector, it says, must work to ensure investment delivers technology-based financial services to the poorest people.

The report sets out a series of future scenarios in which the use of branchless banking services is forecast to be far higher in 2020 – but in two of the these, bursts of rapid acceleration are followed by periods of falloff or flatter growth.

“Mobile banking pioneers give us hope that millions of poor people, especially those living in rural areas, finally might be served by the banking system,” said Elizabeth Littlefield, chief executive of CGAP. “That said, new business models and partnerships that provide the right incentives to banks and banking agents are vital if we are to move beyond simple payments and transfers to being able to offer other basic banking services, especially savings, that poor people need and want.”

Find out more

www.cgap.org

www.dfid.org.uk