End Term Evaluation of the Scale2Save Programme
Scale2Save Campaign
Micro savings, maximum impact.
Abridged report July 2022
End Term Evaluation of the Scale2Save Programme
Scale2Save Programme created a lasting Legacy:
1.3 million more low-income women, farmers and youth are financially included on the African continent
1.3
MILLION
The World Savings and Retail Banking Institute (WSBI) and the Mastercard Foundation engaged Genesis
Analytics to conduct the end-term evaluation of the Scale2Save programme
The purpose of the evaluation was to provide lessons learnt against key learning questions of the programme related to the supply-side.:
- How does the institutional model affect the ability to offer low balance savings accounts (LBSAs)?
- What impact has the programme had on partner Financial Service Providers (FSPs)?
- How has the Scale2Save programme contributed to the ecosystem?
- What has been the value of partnerships in the delivery of LBSAs under the Scale2Save programme?
- What is the combination of supply-side and demand-side drivers that emerge for LBSAs?
- What factors impeded the ability of partner FSPs in the provision of LBSAs during the Scale2Save programme?
- What factors influence the sustainability of LBSAs developed under the Scale2Save programme
- Learnings from the evaluation will be used to inform future efforts of increasing demand and supply for low balance savings accounts and for broader ecosystem learning.
“
The programme
helped FSPs to
overcome obstacles
that would have
been prohibitive
without the
Scale2Save
team’s constant
support.
Scale2Save
ESBG Event
Promoting financial education among women and highlighting the need to focus a few more efforts in improving female financial literacy. This is the aim of the upcoming ESBG event “My World, My Knowledge, My Future: A Female Approach To Financial Education”.
Studies show that women are less likely to be financially literate than men – especially when it comes to investing. Men are statistically more likely to take risks, but also research their activities and understand what they are doing. A basis in financial education is key to our future success in saving, investing, and growing wealth in a safe environment – calculating the risk and understanding what could go wrong, or right.
Empowering consumers – in particular women, who are less engaged than men – with the knowledge to make sound financial decisions and build a better future is important in an era of low savings rates, pandemic recovery and an ever-changing digital world. Every day we find new challenges and face new risks, and we need to be armed with up-to-date information and simple knowledge how to navigate through the financial world.
Join us and be part of a pivotal debate on topics like :
• How can financial institutions raise awareness among women of the risks and responsibilities when investing?
• What can school curricula do to engage more girls in money topics?
• Where can financial institutions improve their financial education plans to appeal to a female audience?
• What can policy makers do to provide support when targeting this group?
SPEAKERS & PANELLISTS
Chairperson of the European Insurance and
Occupational Pensions Authority (EIOPA)
Panellist
Jacki Davis
Moderator
related
Different Strokes for Different Folks
Scale2Save Campaign
Micro savings, maximum impact.
A Customer Onboarding Comparative Analysis
At its inception in 2016, the Scale2Save Program (referred to as the Program in this report) set out to acquire one million customers through 10 innovative projects across the six countries of Kenya, Uganda, Nigeria, Cote D’Ivoire, Senegal and Morocco.
All 10 projects were uniquely defined by a product/service mix that targeted diverse sectors and market segments of the local economies – ranging from micro, small and medium enterprise (MSMEs) to agriculture to micro-insurance.
As the Program is wrapping up, this publication looks at the strategic operations and tactics applied by the Scale2Save partners in East and West Africa to acquire customers.An attempt is also made to analyse the quality and impact of the level of effortand investment made, evidently at varying degrees, against the outcomes that were delivered, particularly regarding the experience a customer gets through that first touchpoint
Objective of the Case Study
This case study sets out, ab initio, to validate the dynamic nature of customer targeting and acquisition, and the varying degrees of success that accompany each tactical approach. While not in doubt that in effect, a combination of tactics would ordinarily be desirable to achieve the expected outcomes, it is safe to assume that one or two dominant tactics tend to carry the greatest burden of the customer acquisition drive for any product or service.
Scale2Save
Financial News & Views: September 2022 Edition
WSBI ESBG
Month: September 2022
WHAT’S INSIDE?
An overview of the banking sector and trends in the Arab region (Page 2)
WSBI-ESBG as platform of exchange among members (Page 3)
Banco Atlántida promotes digital banking in Honduras (Page 3)
Basel III standards in the EU keep banks safe & economy strong (Page 4)
The revolutionary fight against financial crime in Europe (Page 5)
From open banking to open finance (Page 5)
EU wallet: The ecosystem program by nature (Page 6)
An initiative to reach the unreached people in Bangladesh (Page 7)
Conclusions of WSBI’s 6-year programme for financial inclusion (Page 8)
Unbanked adult EU citizens more than halved in the last four years (Page 8)
More publications
Webinar! Delivering inclusive finance
Scale2Save Campaign
Micro savings, maximum impact.
Thank you for joining us last month for the webinar: Proven approaches to delivering inclusive finance
The event drew on the work of Savings at the Frontier and Scale2Save over the past six years with 20 financial service providers (FSPs) in 9 countries across Africa.
Sessions include:
Showcasing critical drivers of sustainable business models employed by participating FSPs to deliver and scale financial solutions for low-income customers.
Insights on leading and managing change within FSPs to serve this market segment successfully.
Practical tools and resources on developing value offerings for a range of low-income customers – including rural and smallholder farmers.
This session is part of the Mastercard Foundation Savings Learning Lab project, a six-year initiative implemented by Itad. The Savings Learning Lab supports learning among the Foundation’s current savings sector portfolio programmes.
Itad also synthesises performance monitoring data and knowledge outputs across the portfolio of projects and facilitates cross-portfolio learning dialogue.
The webinar recordings are now LIVE!
Who are the customers and what financial solutions do they need?
What impact have we seen as a result of increased financial inclusion?
What can a customer outcome based approach tell us about the quality of financial services?
Opportunities and challenges
Innovations in digital platforms for smallholder farmers
Key resources and publications
This session was part of the Mastercard Foundation Savings Learning Lab project, a six-year initiative implemented by Itad.
Scale2Save
Savings and Retail Banking in Africa 2022
Scale2Save Campaign
Micro savings, maximum impact.
New 2022: WSBI survey of Financial Inclusion for micro, small and medium-sized enterprises
Scale2Save WSBI’s programme for financial inclusion, launches today its Savings and Retail Banking in Africa 2022 report. This time, WSBI puts the focus on the state of the focus is on the financial inclusion for micro, small and medium-sized enterprises (MSMEs).
The Savings and Retail Banking in Africa research series aims to help improve access to financial services for financially disadvantaged people in Africa.
The 2022 edition is based upon research conducted with WSBI members in up to 34 countries on the African continent. It was produced in collaboration with FinMark Trust under the Scale2Save programme.
The report targets financial institutions, regulators and donors who deploy financial inclusion initiatives to develop the MSME sector in Africa.
Why the reports foundings are crucial ?
It highlights :
· How national strategies favour financial inclusion of MSMEs
· What services FSPs are offering to MSME
· How FSPs contribute to a successful MSME sector
· How financial services enable access to clean energy
· Supporting MSMEs as bank agents, and
· What impedes better financial inclusion of MSMEs
The report concludes with specific recommendations for regulators and policymakers, financial service providers and market facilitators.
Download Report (EN)
Télécharger Le Rapport (FR)
Scale2Save
Bank Asia Agent Banking: An Initiative to Reach the Unreached People for Better Financial Inclusion in Bangladesh
A number of banks have emerged with several technology driven innovative banking solutions to accelerate the national financial inclusion drive under prudent directives and support from the central bank (Bangladesh Bank) in Bangladesh. Bank Asia pioneered Agent Banking in 2014 for rural financial inclusion under the auspices of Bangladesh Bank. The bank is extending full range of banking services to the last mile citizens across the country.
Bank Asia’s Agent Banking with a vast network of more than 5000 agent outlets is reaching more than 5.1 million customers across 64 districts in Bangladesh. Bank Asia, alone represents more than 45% of total female customers in Agent Banking. It serves more than 2.0 million social safety net (SSN) beneficiaries through its Agent Banking.
Bank Asia’s agent outlets doubled over the past three years and it added more than 3.0 million customers over the past years of pandemic. It partnered with a2i to expand agent network through Union Digital Centre (UDC) and Bangladesh Post Office (BPO) under PPP model.
- Bank Asia owns more than 26% of total agent banking outlets across the industry
- 62% of its total agent banking customers are women.
- The agent banking pioneer ranked top in customer acquisition. More than 90% customers of its agent banking fall under the rural geography.
- Bank Asia is the only bank in Bangladesh who received grants from the Gates Foundation and MetLife Foundation to address the gender gap and financial health within the Low & moderate income group people.
Bank Asia’s unique ‘micro-branch ‘model to make the rural economy more vibrant
Bank Asia adopted its pioneering ‘micro-branch’ model in agent banking. Recently it expanded a sizeable network for its invention of ‘rural micro-merchant’ towards building a complete digital banking ecosystem for the rural economy. Agent banking, in contrast to other branchless banking, is largely driven by an exclusive specialized agent model. This could be due to initial investment requirements to set up an outlet: An outlet in agent banking is exclusive for Bank Asia and distinctly branded by various permanent marketing collaterals and point-of-sale materials (PoSMs). This requires 10-15 times higher investment than is needed for a typical mobile financial service (MFS) agent outlet. This model focuses on the three stakeholders bank itself, banking agents and customers.
In accordance with the central bank guidelines bank must maintain a minimum ratio of 3:1 for rural and urban agent banking outlets. Bank should prefer remote rural areas, chars, islands and other geographical areas with limited accessibility for establishing new agent banking outlets where there is no bank branch or agent point within a proximity of one kilometre (with an exception of agent on UDC).
Bank Asia has 3 categories of agent outlets 1. Individual 2. Union Digital Centre (UDC) 3. E-Post centres by Bangladesh Post Office. Individual outlets are run by the individual entrepreneurs whereas UDCs and e-post centres are run by the designated entrepreneurs assigned by the Local Government Division (LGD) and Bangladesh Post Office.
Bank has defined a fees, charges and commission structure for the agent banking services. Agents earn from the commission set by the bank for each services category.
Key customer value proposition
#1 providing banking access to the last-mile citizen
- Bank Asia has an agent outlet network of more than 5000 across the country. Approximately 80% of them are located in rural areas. Bank Asia reports that more than 5.0 million clients transact through its agent outlet network, which accounts for approximately 34% of the total market share among 29 players. Unbanked customers can open bank accounts at the agent outlets and make peer-to-peer transfers to other bank accounts and pay their utility bills including passport fees and other variety of payments. Currently, a significant proportion of Bangladeshis still don’t have access to mobile phones, while agent banking offering bio-metric based digital banking services without mobile phones or any device ownership dependency at customers end.
- The reliance on agent networks has its challenges as the provider must principally control quality and service. However, Bank Asia’s management strategy pivots on its careful selection of agents. They are primarily small business owners, fresh entrepreneurs and other institutional agents (like Union Digital Centre under a2i and e-post centers of Bangladesh Post Office) in rural areas. This allows Bank Asia to focus on their ability to manage their liquidity, community standing, trust, and operating hours. Bank Asia’s agents are also required to invest approximately BDT 0.5 million, which builds ownership and motivates them to keep customers happy.
#2 Greater convenience, ease of use and cost effective
- Rural customers can access Bank Asia agent outlets with greater ease when compared to a bank branch and other financial service outlets. Rural customers need to travel a maximum distance of no longer than two kilometres to reach a Bank Asia agent outlet, who provide the added advantage of operating beyond typical banking hours.
- Compared to USSD or mobile phone based financial services where simple cash-in transactions can require seven to eight menu screens and entering two to three number sequences, Bank Asia agent banking to run on bio-metric fingerprint and facial recognition system without any dependence of mobile phones at user end.
- Agent banking fees and charges are also affordable. It offers Free of Charge (FOC) cash withdrawal in compare to the alternatives in the market for OTC withdrawal from the mobile wallets which charges 1.80% (i.e. BDT20 per thousand as per market practice) of the withdrawal amount.
#3 Building trust in digital platforms
- Cybersecurity is a burning issue across the regions and Bangladesh isn’t an exception. In 2017, country’s mobile payments industry faced a huge challenge with the rise of ‘digital hundi’ due to some anomalies in customer KYC. Given that customer trust of digital platforms, and in particular financial transactions is already low, incidents like this do not bode well. And payment solution providers, who are relatively new supply-side actors in the financial services space, cannot afford any reputational risks.
- Bank Asia has invested in a multi-tier security system that is compliant with latest regulations and global standards for branchless banking. As an added security measure, Bank Asia uses bio-metric authentication through m-POS to confirm all transactions at an agent outlet. Customer KYC is also cross-checked with the Election Commission (EC) NID database. Bank Asia also introduced a robotics technology for inward remittance disbursement through its agent banking. This robotics technology has significantly minimized the human error and faster the process of disbursement.
#4 Capturing the mass-market; leveraging key use-cases
The last decade in Bangladesh has seen substantial progress in terms of key underlying drivers for digitising financial services, such as more reliable internet connectivity and increased smartphone penetration. The market is supported by favourable demographics, such as a relatively youthful population and increasing income levels, with the growing middle-class segment. However, while banking agent networks exist and are growing in Bangladesh.
A number of use cases which have differentiated Bank Asia Agent Banking from other alternatives in the market. Bank Asia has been focusing on the low and moderate income group people with a vision of greater financial inclusion through social safety net payments, inward remittance disbursement and loans for rural micro-entrepreneurs. The agent banking pioneer has already made noteworthy contribution through these use cases. Both inward remittance and loan disbursement through Agent Banking experienced a significant growth over the past two years of pandemic.
Lessons learned
- Almost 50% customers are women in agent banking, however only around 2-3% agents are women. Female customers feel more comfortable to deal with a female agent.
- Bank faces difficulties in finding suitable women agents who can meet the application criteria.
- Agent outlets may act as center of excellence for providing complete digital banking services (payments, purchase, transfer, savings and credit) to the rural citizens of the country.
- Public-private partnerships with Union Digital Centers by a2i under the ICT Division and Bangladesh Post Office helped to achieve some quick wins in customer acquisition and agent network expansion.
- Partnerships with government entities facilitate more prospective businesses for the bank within digital space.
- Agent banking is more cost-effective than any other digital financial services in Bangladesh. Higher transaction limit, cost and bio-metric security were the top three factors for users’ preference of agent banking over MFS.
- The range of service offering from agent banking is greater than mobile financial services (MFS) channel. Agent banking extends full range of banking services to the last mile citizens whereas MFS do serve only digital payments without any savings and loans products.
Transitioning customers from OTC money transfer to financial wellness
In Bangladesh, the OTC trend is very similar to other Asian mobile/e-money markets, such as Pakistan, Myanmar, Vietnam and Cambodia, where OTC transactions made up the vast majority of transactions and served as a significant accelerator in each market.
However, we should keep it in our mind that MFS agents offering Cash in and Cash out (CICO), money transfer and bill payments services do not essentially create access to formal savings, credit and insurance for the last mile deprived people.
Bank Asia Agent Banking has been serving the rural citizens through a right set of value chain ‘Payments, Purchase, Transfer, Savings and Credits”
By Jakirul Islam
Senior Vice President in Bank Asia Limited
Launch EVENT : Persona Segmentation Toolkit
Scale2Save Campaign
Micro savings, maximum impact.
What to expect from the webinar ?
S2S is a partnership initiative between WSBI and the Mastercard Foundation that started in 2016 and has to date reached 1.3 m low-income savers across six countries in Africa.
We’ve been working with a mix of 10 FSPs in Africa to enable them to better serve the underserved and unbanked population, in Nigeria specifically we’ve been targeting market women and smallholder farmers through our partnerships LAPO MFB and FCMB.
S2S supports FSPs so that savings become a viable business opportunity. We believe that savings can contribute to greater financial resilience of low income people. For that we aim to understand the type of services low income people value, appreciate and need, and what they are using their savings for.
Research and data collection is therefore an integral part of S2S: This Toolkit started in fact with financial diaries research that we conducted in Nigeria but also in Morocco, Senegal, then complemented with qual data and Findex data as the macro-level framework.
Once the research was concluded we did ask ourselves how can we make these vast amounts of data best of use to our partner FSPs, rather than producing many pages of research reports. The Webinar will guide through the process from data collection to Toolkit creation and about the end result of that process.
Scale2Save
New taxes on banks can affect economic growth
In the current context of high inflation and economic slowdown, and with the possibility of a recession in the horizon, it is more important than ever that savings and retail banks preserve their solvency. In this respect, the recent decision in some EU countries to impose new windfall taxes on the banking sector will further reduce the latter’s lending capacity to corporates and individuals.
BRUSSELS, 6 September 2022 – European savings and retail banks played a very relevant role during the Covid-19 pandemic, contributing to sustain businesses and families during lockdown periods and beyond, while closely cooperating with the authorities to avoid a credit crunch. They have also been publicly recognised in many jurisdictions as a relevant part of the solution to the post-pandemic economic recovery.
While the effects of the Covid-19 pandemics are still being felt, the EU economy is now facing a new crisis arising from supply chain shortages and the war in Ukraine, in which savings and retail banks continue to support their customers and economic activities in general. Even further, they are actively contributing to helping Next Generation EU funds reach the real economy, by providing additional funding through their extended network of branches covering the whole EU territory and through their expertise in risk assessment.
In the current context of high inflation and economic slowdown, and with the possibility of a recession in the horizon, it is more important than ever that savings and retail banks preserve their solvency. In this respect, the recent decision in some EU countries to impose new windfall taxes on the banking sector will further reduce the latter’s lending capacity to corporates and individuals. These sectorial taxes are discriminatory and unjustified, as the expected increase in interest rates is unlikely to lead to extraordinary profits in the banking sector (they can even decrease if NPLs start to grow). In fact, marginally higher rates simply represent the return to a normal situation after many years of very low profitability due to the negative interest rate environment, which, in turn, has also negatively affected returns to shareholders. These new taxes have also placed financial institutions in a difficult situation with their supervisors, as the requirement of not transferring their cost to customers goes against EU legislation (“EBA Guidelines on Loan Origination” state that loan pricing should include all the costs supported by banks, including taxes).
A tax on the banking sector may also undermine the social work undertaken by savings and retail banks. Social responsibility is a core value of our members; towards their clients, employees, communities, and the environment. In this context, policy makers should carefully consider the negative impact of taxation on banking foundations which have historically been involved in investing in local communities, fighting poverty, and helping those who are the most vulnerable in society.
The EU financial sector already contributes significantly to EU national budgets under the current tax framework, and it is ESBG’s view that what is needed in these uncertain times is a strong and competitive retail banking sector in Europe that continues to fulfil its key function as credit provider to companies (especially SMEs) and families alike. Therefore, any measure that can weaken the recovery of the EU economy should be carefully considered.
Finally, we are also warning against the risk of a fragmented EU tax system and calling for more tax harmonisation across EU countries. Additional taxation at national level is detrimental to a level playing field by distorting competition within the EU internal market. A particular source of distortion arises from shadow banking activity (e.g.: hedge funds) and other non-bank financial players (e.g.: big techs or credit cooperatives) which generally remain outside the scope of windfall taxes applied to the banking sector. For this reason, we believe that uncoordinated national initiatives in the field of taxation should be avoided at all costs in order to provide the necessary conditions for a fair and even distribution of financial services to European citizens and companies; especially SMEs.
Press contact:
Leticia Lozano, Senior Communications Adviser
Tel. +32 2211 1196
related
ESBG response to the EFRAG consultation on its first set of draft ESRSs calls to ensure levelled global playing field
ESBG submitted its response to the European Financial Reporting Advisory Group (EFRAG) public consultation on the first set of Draft EU Sustainability Reporting Standards (ESRSs) on 4 August. The consultation comes in response the European Commission’s proposal for a Corporate Sustainability Reporting Directive (CSRD) which envisages the adoption of EU Sustainability Reporting Standards (ESRSs). As part of this, the Commission mandated EFRAG to provide technical advice in the form of draft sustainability reporting standards.
In its response, ESBG highlighted the need for consistency between the International Sustainability Standards (ISSB) sustainability disclosures and the EFRAG ESRSs in order to ensure a levelled global playing field. Moreover, ESBG emphasises the lack of proportionality with respect to disclosure requirements, specifically for smaller/unlisted companies and proposes the provision of certain reporting requirements being made optional.
With respect to implementation challenges, ESBG considers that the data availability issue is the most critical challenge for financial institutions. Taking into consideration the above, ESBG proposed two phase-in solutions that are mutually complementary: i) first year reporting on own operations and gradual reporting on information from the value chain and ii) prioritisation of climate topics and gradual consideration of other environmental, social and governance topics.
Furthermore, we believe that there is not enough guidance in the exposure drafts with respect to the application of the double materiality principle (the requirements for companies to disclose not only the risks that affect, but also their impacts on society and on the environment). In this sense, this concept needs to be clarified and more guidance is needed in relation to specific sectors in due time.
ESBG stresses the limitation on disclosing value chain information for companies. We consider it is difficult to obtain information from companies that are not under the control of the institution (e.g. associate companies). We propose that a phase-in period of 2 years must be granted to financial undertakings to allow them to adapt their processes to collect the necessary information from their value chain.
As a next step, ESBG will evaluate if there is interest from members in submitting input into the up-coming EFRAG consultations on SME specific standards as well as on sector specific standards (EFRAG consultations are expected to be published in 2023).
