People living at the “last mile” in poor countries are likely far from bank branches and ATMs, and often not covered by Internet service. Such standard channels for delivering financial services in rich countries are not available to millions of the world’s poor.
Therefore, alternative channels are needed. Their development requires tackling some tough challenges, including inconsistent mobile phone network coverage, and a lack of trust in new technologies or formal institutions.
Overcoming these challenges takes innovation and partnership. In India, we’re helping to transform microfinance institutions that previously dealt only with microcredit into full-fledged rural agents of commercial banks. In the Philippines, we’re enabling neighborhood “sari-sari” stores on far-flung islands to deliver digital financial services--and there are over 500,000 such stores. And in Africa, we helped banks and microfinance institutions link with mobile network operators (MNOs) to use their far-reaching network of agents as access points for bank accounts.
Working with local communities and partners, we push the reach of financial services to the last mile.
Grameen Foundation’ Community Agent Network (CAN) embodies a new approach to extending financial inclusion to people in poor, remote areas. It has reached up to one million low-income people in the Philippines, where more than one-third of the country’s 7,107 islands have no banking infrastructure.
Funded by the JPMorgan Chase Foundation, CAN combines a mostly female agent network with a digital financial services platform that can connect people with banks, utility companies, government agencies, and other businesses. It has engaged nearly 1,900 agents, 75 percent of whom are women who operate small local shops (sari-sari stores).
In the first two years of operations (2016-2017), CAN agents facilitated more than 4.3 million transactions valued at 1.3 billion Philippine Pesos (USD 24.9 million). Sari-sari store operators can now help their customers send payments for services, transfer money to loved ones, deposit money into a digital account and much more.
In creating CAN, Grameen Foundation partnered with financial technology providers Action.Able, Inc., and FSG Technology Ventures, Inc. The partners created digital “point of service” devices that can connect directly over any mobile network, with any bank, as well as with government agencies and other businesses.
Sustainability is built in to the program: both the agents and the technology companies get a small fee for each transaction; banks get new customers, and local people are able to bank without spending large sums of money and hours of their day traveling to a distant bank branch.
Uganda has a big shortage of bank branches and ATMs. In 2012, there was less than one financial services access point for every 20,000 people nationally—and fewer still in rural areas. Grameen Foundation has been on the cutting edge of a wave of change, using digital technology to connect underserved communities to formal financial accounts using mobile money.
In 2012, we began work to transform two financial institutions to enable them to reach the rural poor. To do so, we worked with Centenary, the largest bank in Uganda; Pride Microfinance Limited, a wholly owned government financial institution; the mobile network operators MTN and Airtel; and the technology company Cellulant.
With Cellulant, we developed a digital platform that enables account holders at Centenary Bank and Pride MDI to use their mobile phones to make deposits or withdrawals at any mobile money agent location across Uganda. Suddenly, the need for long and sometimes hazardous trips to the bank was gone. The new service launched in 2015 enables fast, flexible, secure, and remote transactions for any of Centenary Bank and Pride MDI’s clients.
While Grameen Foundation’s role has ended, the channels and products we developed live on as a sustainable digital financial solution that truly serves the rural poor. It is attracting new rural customers every day. As of October 2016, the system serves more than 170,000 rural customers, and is growing by an additional 10,000 clients each month.
India’s three million women micro-entrepreneurs help drive the economy, providing goods and services in small shops around the country. Given access to financing and secure convenient ways to repay their loans—without having to shut down their shops and travel long distances to make payments--they could do even more.
In 2014, with funding from Citi Foundation, Grameen Foundation teamed up with the microfinance institution Sonata Finance and Oxigen Services, a mobile money provider, to make it easier for women to repay their loans and to build their financial and digital literacy. At the same time, the project helps Sonata reduce problems related to cash management and to increase its customer base deep in rural areas.
Rural low-income Sonata clients can now repay their weekly, bi-weekly or monthly loan installments with their mobile phones when they visit Oxigen service agents in their own villages, rather than traveling up to 15 miles to reach a Sonata branch.
Through the project, women gain a critical time-saving bridge to access financial services, and knowledge of mobile money products and services.
As of May 2016, the project had reached out to more than 23,000 Sonata clients. Some 99 percent of these clients are women living in rural Uttar Pradesh.