How Savings and Retail Banks Can Bring an End to Extreme Poverty

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Register for the 17th Microcredit Summit today!

Join us in Mexico for the 17th Microcredit Summit this September 3-5 where savings will take an important place in the agenda.

The World Savings and Retail Banking Institute (WSBI) declared its support for the goal of helping 100 million families lift themselves out of extreme poverty by announcing a Campaign Commitment at the 2013 Partnerships against Poverty Summit held last October 2013 in Manila, Philippines. The Microcredit Summit Campaign recently caught up with the WSBI to learn about the progress they’ve made on their Commitment and the ways they are working towards the end of extreme poverty.

logo_wsbi_new_quadri-300x150The World Savings and Retail Banking Institute (WSBI) represents the interests of approximately 7,000 savings and retail banking institutions in 90 countries. It focuses on issues of global importance and supports the aims of the G20 in achieving sustainable, inclusive and balanced growth and job creation worldwide. WSBI favours an inclusive form of globalisation that is just and fair, supporting international efforts to advance financial access and financial usage for everyone. It supports a diversified range of financial services that responsibly meet customers’ transaction, saving and borrowing needs.

WSBI has long been committed to alleviating poverty via financial inclusion. In fact, WSBI member institutions rank financial inclusion as the most important international policy topic. At last November’s Microcredit Summit, WSBI made two Commitments for 2014:

  • To study youth markets to better identify successful strategies for inclusive financial products and services, focusing on four key areas – usability, affordability, accessibility and sustainability – and seek to publish a summary of preliminary outcomes by the end of 2014.
  • To hold with partners and member banks at least three events to share knowledge about appropriate pricing research in Burkina Faso, El Salvador, Indonesia, Kenya, Lesotho, Morocco, South Africa, Tanzania, Uganda and Vietnam, and its implications for offering savings products for the poor.

WSBI is indeed on track to fulfill these Commitments. Regarding the first Commitment, we have begun a study into the youth markets of Morocco’s Al Barid Bank and Kenya Post Office Savings Bank, in order to better understand the financial habits of people aged 15 to 24.

Regarding the second Commitment, since last November WSBI has delivered workshops at the European Investment Bank and the WSBI African Regional Group Meeting, a “mobile banking as good as mobile money” workshop for the Association of Savings Banks of East Africa (ASBEA) and the WSBI Asia Regional Group Meeting, and a webinar for the Swiss government’s State Secretariat for Economic Affairs (SECO). We will hold another event at WSBI’s General Assembly in San Salvador on July 3rd and 4th.


Poorest Four Countries (78 Million Adults)

But these two commitments are really just the tip of the iceberg when it comes to WSBI’s overall dedication to financial inclusion. For example, over the past five years, WSBI has worked on a major financial inclusion programme with member banks in the ten countries mentioned in the second commitment above. Apart from project implementation, the core goals of the program were to articulate and disseminate lessons learned to a variety of stakeholders.

One of our first tasks was to scope and scale the target markets, from which we learned that the unbanked poor were the big open market space. The challenge was to understand exactly who the unbanked are, what they need, and how much they can afford to pay to meet their needs. As we broke down the target markets by type of unbanked adult, we learned quickly that demographics matter hugely, and that the young “third adult” in households (aged between 15-24) made up a very significant proportion of unbanked households.


Three Best-off Countries (220 Million Adults)

While we had a good idea about the financial habits of young people in the poorest countries that we work in–in one form or other they seek to contribute to the family budget–in the better off countries, we could find no research about the financial habits of the 42% of the unbanked population that are young.

Therefore, our Microcredit Summit Campaign Commitments not only contribute directly to the goals of our financial inclusion program but also help to fulfill our high level mission of increasing financial access and financial usage for everyone.

What’s more, empirical evidence at micro-economic, local economic, and macro-economic levels supports the conviction that financial inclusion helps poor households improve their lives and spur economic activity. WSBI’s Marrakech Declaration goal of “an account for everyone” is also fully consistent with the Microcredit Summit Campaign’s goals.

We are actively seeking funding to extend our financial inclusion program to other countries, to work with local social structures–such as village savings and loan associations–and to take  advantage of technology (mobile banking) and innovative techniques (data analytics) that help member banks to develop more customer-centric approaches.

Join WSBI in stating YOUR Campaign Commitment

One thought on “How Savings and Retail Banks Can Bring an End to Extreme Poverty

  1. Pingback: WSBI’s journey in making small-scale savings work | 100 Million Ideas

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