News & Views magazine: Q1 2020


Month: April 2020

Measures taken by WSBI-ESBG members help mitigate effects of Covid-19 on local economies, the Q1 2020 News & Views highlights. They help serve people in communities, supporting households, SMEs and protecting business continuity and ramping up digital channels.

What’s inside:

WSBI statement on Covid-19 
ESBG statement on Covid-19


Scale2Save publishes European Microfinance Week Panel Summary

Scale2Save Campaign

Micro savings, maximum impact.

Scale2Save publishes European Microfinance Week panel summary
​​​​​​​​​Panel focused on role of support organisations in encouraging effective and inclusive savings
The following piece provides a summary of a panel session at the first-ever virtual European Microfinance Week that explored the role played by three organisations in savings programmes.

WSBI Scale2Save Programme Director Weselina Angelow joined Ilonka Rûhle-Stern from the Sparkassenstiftung für internationale Kooperation e.V and Sukhwinder Arora from Savings at the Frontier to share major lessons learned in serving low-income savers and the challenges that financial service providers (FSPs) can face in encouraging inclusive and effective savings. The panel was moderated by Micol Guarneri, an independent consultant.

Micol Guarneri (picture at right) opened the session by stressing the importance of savings services for poor people and invited the panellists to discuss the value of savings for clients and banks. Sukhwinder Arora told the audience how the savings sector developed over the past decades and why Savings at the Frontier (SatF) programme was set up. Already in the late nineties, people in the microfinance sector realised that the microfinance sector could provide more services than credit only. When Grameen bank offered pension services, in a few years they could mobilise much more savings then all the credit outstanding. However, in the words of Arora: ”It is too early to declare victory of the financial sector in savings”. While poor people love good quality savings services, the business case for providing small savings is not automatic. One of the aspects of savings that still requires a better understanding is, for example, why many poor people who have bank accounts and mobile wallets, still do 80 or 90% of their transactions outside the formal sector and what is the relation between the formal and informal sectors.

Weselina Angelow also looked back at the history of the savings sector, recalling the strong focus on massive outreach and on developing mechanisms that improve access for the poor. There are more than 1.733 billion accounts offered through the WSBI network. The network as part of its commitment to the Worldbank’s Universal Financial Access Agenda (UFA 2020) had between 2015 and 2018 generated 400 million new transaction accounts. In the meantime, the sector has realised that there is more work to do on the quality of savings. The Scale2Save programme of WSBI aims to support 12 FSPs in six African countries to build a better understanding of the value of financial services for poor people and the business case for low-value savings. The programme drives development of customer-centric solutions that help clients to become resilient and improve their well-being. Scale2Save has to date reached out to 490,000 savers. It further conducts research that looks at customer needs, the quality and business models for inclusive savings. .

Ilonka Rühle-Stern explained how the MFI RENEW worked out a business model for savings in Bhutan. They informed rural people that they could become eligible for a loan after six months of regular saving small amounts of as little as €1 per month. The low barriers to saving kept drop-out rates to a minimum. With this business model, simple financial products and thanks to the absence of competitor FIs in the remote region, RENEW has reached a customer base of 22,000 people and a portfolio of savings and loans worth €2.5 million. The savings not only covered many of the loans, but also created the critical mass of clients for the microfinance institutions (MFIs) to become successful. Building financial literacy was another key success factor. The MFI staff organises centre meetings once per month to serve their clients, using those meetings to also inform them on the various aspects of finance.

Guarneri then asked the panellists to discuss some of the challenges that financial institutions are facing and how they can be supported to overcome these challenges. According to Arora, the core activity of support organisations in the savings sector is to find sustainable business cases. He used the example of geographical proximity to explain this. For many financial service providers, reaching out to rural people is a challenge, because branching out with many offices increases operational costs. SatF supports partner FSPs as to how to use satellite imagery and geo tagging with practical Excel-based tools, to visualise the geographical span of their agents. This helps them identify where they can improve uptake of their services and improve efficiency.

Angelow agreed that convenience of services and proximity are key to improve access. For inclusive business models, FSPs should develop customer-centric solutions that take the value added for customers as the point of departure. Save2Scale provides coaching to FSPs for change management to become customer-centric institutions where the customer is at the centre of attention along the entire value chain of the financial service offer. The coaching can help build an inclusive savings mentality, support the digital customer journey or analyse how customer-centric a FSP already is. For lasting change, it is important that FSP staff own the change process. They must be empowered to make the change. There can be no sustained change if the FSP does not recognise the benefits of the change agenda. Angelow added that the FSP can be supported with data intelligence to be able to see the benefits of a more adaptive and integrated business model approach. The change should also be organisation-wide across the different functional teams and may include changes in organisational culture and customer engagement. In summary, the FSPs should become learning organisations. Guarneri and Rühle-Stern confirmed the importance of the management’s mindset and of the organisation’s culture to make the difficult transformation from a credit institution to a credit and savings institution. According to Rühle-Stern, for support organisations to be effective, they do not necessarily need a strong partner at the outset, but rather a partner that is willing to adapt and learn.

Guarneri asked Rühle-Stern to share some of the lessons learned from past experiences with encouraging inclusive savings. Rühle-Stern argued that finding a balance between social and financial aspects is key to success. MFIs must at least cover their costs to be financially sustainable. At the same time, savings services require more patience from MFIs than credit services. Improving inclusiveness through savings requires building an understanding of the target group through focus group discussion and other types of market research. MFIs must also understand that inclusiveness and effectiveness complement each other. For example, RENEW MFI uses savings to refinance loans thus being less dependent on external (expensive) refinance.

Guarneri asked Arora how support organisations can help FSPs with the analysis of data, to which Arora responded that FPSs have to start by accepting that ‘approximately correct’ is better than to be precisely wrong. With that in mind, FSPs and support organisations should start collecting not just quantitative but also qualitative data and analysing data jointly. They can analyse the performance of branches and products and create dashboards of particular relevance to the FSPs. The usefulness of qualitative data collected through phone calls should not be overlooked. Arora argued that many FSPs spend a lot of resources on marketing. They should also spend resources on the collection of data to learn from customers’ behaviour and feedback to improve their performance. If customers really like the product, they will do the marketing. Angelow added that Scale2Save can provide operational toolkits for FSPs to support them with the translation of research findings to solutions.

Angelow also argued that customer engagement in the savings sector is sometimes very low and that formal savings are not yet fully effective and inclusive. Scale2Save’s definition of an active and engaged customer is a customer that makes at least one transaction per month. The programme bundles financial products to trigger more engagement. At the same time, the programme aims to keep the number of different savings products limited to prevent confusion among customers.

Finally, Angelow argued that micro savings customers may value safety and accessibility more than low prices. This could imply a need for building more trust in customer relationships, digital solutions for other aspects of the business model and convenience partnerships with other organisations.


About European Microfinance Week

More than 500 participants from 60 countries took part in 50 sessions at the European Microfinance Week, hosted by e-MFP – the European Microfinance Platform. A top event in the financial inclusion calendar, the event provides a unique meeting point for microfinance and financial inclusion professionals working worldwide. EMW brings together all sectors of the inclusive finance industry including consultants & support service providers, investors, multilateral & national development agencies, NGOs and researchers. With an unparalleled programme and prestigious speakers, European Microfinance Week is recognised for its high-quality sessions and excellent networking opportunities.

Read the full e-MFP report on 'Lessons and Best Practices from the European Microfinance Award 2020


Agency banking for merchants takes hold in Morocco

News | Scale 2 Save

Month: April 2020


Scale2Save Campaign

Micro savings, maximum impact.

​​​​​​- How a WSBI programme is being rolled out in Morocco

- Al Barid Bank pilot connects merchant agents with customers via mobile app ​​

The following piece was published on the Mastercard Foundation blog. that will be featured in the upcoming April edition of News & Views.

BRUSSELS, 26 April 2018

Updated: 22 November 2018 (Includes programme branding changes. Replaces MTripleSW with Scale2Save)​

A Mastercard Foundation partnership with WSBI is working to enable access to financial services for at least one million low-income people in six African countries. The account below shows how the program is being rolled out in one of those countries: Morocco.

By Céline Stevens, Programme Manager, Scale2Save​, WSBI

Agency banking, when a third party (agent) provides financial services outside of bank offices, took its first, tentative steps earlier this year in Morocco following new regulations enacted in 2017.

I saw first-hand the potential for agency banking to improve access to financial services after spending two days with Al Barid Bank, the postal bank in Morocco. It is a partner financial institution in the WSBI programme Scale2Save​, which is a joint initiative with the Mastercard Foundation.

ABB had invited me to attend meetings to launch the agent banking pilot in Ben Guerir, a small city of about 90,000 people and a provincial capital in central Morocco. Ben Guerir is home to a Moroccan Air Force base and two ABB branches.

ABB had its first merchant recruited for the pilot in this city. A small grocery owner, the merchant represented the start of a bigger goal: to sign up 5,000 new consumer clients and 100 merchants in Ben Guerir. The project aims to harness the use of an app on local merchants’ smartphones that would enable ABB customers to make purchases, to cash in/out, and to make other transactions — a technical first in Morocco and for ABB.

From the experience with this first “pilot” merchant came plenty of “ah-ha” moments.

Challenging assumptions
During my visit, I met with the director of one of the ABB branches, who demonstrated real local knowledge despite having only two workers — one manager and one customer advisor. Even with such slim staff levels, there was that one merchant who had already agreed to take part in the program. But it didn’t go off without a hitch.

At face value, the merchant sign-up would seem rather simple. First, candidate merchants must already have an account at ABB. Second, they must be willing and able to load the ABB merchant app on their smartphone to receive online payments. The app allows merchants to connect wirelessly whenever a customer with the ABB mobile app comes into the store. The store customer mobile app “talks” to the merchant app either through a QR code or via SMS. This, however, is easier said than done.

On the day of our visit, the candidate merchant received a team from ABB headquarters and the local branch. Joining the group was the branch customer advisor, whose computer was just uploaded with software designed to track merchant agents who sign up for the app.

Loading the app on the merchant’s smartphone proved a bit of a challenge. It didn’t work the first time, so ABB took the smartphone back to the branch and uploaded the app there. The problem was solved simply by a better internet connection during upload. Lesson learned: faster bandwidth required.

Image at left: Screenshot of Al Barid mobile app

The merchant and the ABB people then returned to the merchant’s grocery store to show him the new app and how it works. But, even after training, the merchant remained unconvinced. Security concerns popped into his head, especially if the smartphone was stolen or if he was to forget it somewhere. That’s where the branch director had sway over him, that local touch that no one from HQ would dare to attempt. The branch director explained that the phone will have a key, just like the door in his store. The merchant was put at ease. Lesson learned: local knowledge counts.

Ambitious objectives
Beyond that first merchant in Ben Guerir is a rather vast set of merchants that ABB would like to pursue, including those working in a big open-air market. On the customer side, the ABB team would like to tap into the military community at the nearby base as most of these people have an account with ABB. That requires getting the word out to military personnel through targeted marketing and word of mouth. ABB must make the case that the ABB mobile app connects them to their families who are often not living on or near the base.

Another benefit for the military personnel is savings. By adding a savings product, the economies gained by sending money to family members also using the app can be put aside for the future. That’s a big selling point because most of a soldier’s salary is sent to dependents. Families avoid high-fee wire transfer services. That leads to savings, our main goal. Lesson learned: demonstrate savings, the need to connect.

Beyond technical glitches faced when setting up the first merchant agent, we know that access issues will still surface. Right now, merchants need a Google account to download the app. Is that enough? With apps come updates which will need to be thought through, as well, before bringing the app project to scale.

An identity issue may be problematic on the customer side, too. Not so much in Morocco, I’ve been told, but more so in other parts of Africa because it is not always the person who owns the phone who also owns the chip installed in the phone.

Data is another challenge: not necessarily how to harvest it but what to do with it. Will it help fine-tune agent and customer use to get people to take up the offer? Will it help provide real savings for customers?

Recruiting the first merchant is a big step but there is plenty of work ahead. ABB aspires to scale up and eventually attract 5,000 merchants and 250,000 customers to its mobile accounts. Half of these people are seen as opening savings accounts.

We are in the early days of this project, but if some of the initial roll-out bumps can be smoothed over, the road ahead may well turn out to be productive and profitable for clients and banks involved in the Scale2Save programme.​