Cooperative Finance: Global Good Practices.   Cooperative financial institutions hold the promise of expanding access to financial services, reducing costs for basic products, and complementing the traditional banking sector. Organized by the World Bank, Agence Francaise de Developpement, Canadian International Development Agency, Kreditanstalt fur Wiederaufbau, Netherlands Development Finance Company, UK Department for International Development, and United States Agency for International Development.  Washington, D.C. April 10 and 11, 2007. (more Inclusive Financial Systems links ) 
 

Lending to Small Business - Making Scoring Work. This article gives insight into how small business credit-scoring works and the caveats that should be applied. With limited information, how valid can credit scoring really be? By Pruis, Joel J. February 2006.
(more Credit Reporting links )

Exploring Frontiers in Payments Systems Development. Committed to improving financial infrastructure, promoting enterprise development and economic growth, the World Bank and the International Finance Corporation, are organizing a conference that will gather senior representatives from central banks, securities regulators, commercial banks, non bank financial institutions, payments operators, and multilateral institutions. World Bank headquarters, Washington, D.C.    (more Payment Systems links )
 

General principles for international remittance services - consultative report.This report provides an analysis of the payment system aspects of remittances, on the basis of which it sets out general principles designed to assist countries that want to improve the market for remittance services. The Committee on Payment and Settlement Systems (CPSS – BIS) and the World Bank. January 2007.
(more Remittances links )

Postal Financial Services and Financial Inclusion

By David Porteous of Bankable Frontier Associates and Isabelle Huynh, Postal Policy Specialist in the World Bank's Global Information and Communication Technology Department.

Today, the majority of people in developing countries are excluded from access to basic financial services. The goal of promoting financial inclusion has moved higher up the policy agenda in many countries, supported by new evidence that increased access to financial services can promote faster economic growth and also reduce poverty and income inequality. 1

In many developing countries, postal networks already offer several basic financial services, such as money transfers and savings accounts. Moreover, postal networks have widespread coverage even in rural areas which the formal financial sector usually does not directly reach. There are almost twice as many post offices and postal agencies (500,000) as commercial bank branches (275,000) in the developing world. How best to use and develop these large networks for expanding access to financial services is an important question for policy makers to consider.

Understanding how postal networks are being used to expand access to financial services across a wide range of countries was the objective of a World Bank study carried out by ING Bank in 2004. Researchers reviewed the role of postal networks across 60 developing countries in five regions, with in-depth analysis of seven.² Summarized in a recently released World Bank Discussion Paper,³ the findings provide insights into the current status of postal financial services worldwide, as well as useful lessons as to how these services may be expanded to both improve basic postal operations and deliver more and better financial services to the poor in developing countries.

What role do postal networks play in providing financial services?

The coverage of postal networks varies considerably by region, as shown in the blue line in Figure 1 (a lower number means a larger outreach). The best regional coverage is to be found in Europe and Asia which have one postal outlet per 7500 and 4350 people respectively. Similarly, while it is estimated that some 15% of the world’s adults, some 390 million people, have a postal savings or transmission (or giro) account, the regional penetration varies from a high of 20% in Asia, owing to popular financial service offerings in India and China, to a low of less than 1% in Latin America, where the postal network is less pervasive.

In addition to geographical penetration, the range and types of postal financial services offered also differ considerably by region. Most post offices offer payment products, such as remittances or bill payment, which were originally developed using the postal infrastructure as a means of moving money, even to remote areas. Many networks also evolved to offer savings facilities either through postal savings accounts, the deposits in which were often invested in government bonds (as commonly in Africa); or through the sale of Treasury bonds to the public, acting as an agent of the government (as in India & Pakistan).   In some cases, postal financial services also included insurance and retail credit distributed on an agency basis (as in Morocco, where Poste Maroc developed a partnership with Wafa Assurance to distribute a pension insurance scheme through postal outlets).   (continued)