A recent article by Grameen Foundation blog speaks about the novel ‘micro-savings initiative’, that aims at financial inclusion of the poor. This initiative is a three-year project funded by the Bill & Melinda Gates Foundation that aims to reach 1.45 million new savers across three institutions in Ethiopia, India and the Philippines.
The Grameen Foundation launched a partnership to test and scale this mobile-enabled business correspondent approach with the following institutions: ICICI (India’s largest private commercial bank, which holds the savings deposits), Cashpor (the “business correspondent,” which uses its deep field network to originate and service the deposit accounts) and Eko Technologies (the technology partner, which enables a fully mobile-enabled approach as well as coordination among Cashpor’s and ICICI’s back-office systems).
It also states that client level research have revealed results that speak for itself: More than 60,000 savers have opened accounts, with an average of 250 people opening a savings account each day. The average savings balance is 348 rupees (US$7.50), and the average balance has been increasing at a rate of 15% per month.
We are seeing the volume of transactions and the average savings balance increase month-over-month. And, the very poor can and do save – 68% of Cashpor’s savings clients live below the $1.25/day poverty line, and the vast majority of Cashpor’s existing clients live below the $2.50/day line.
The article also mentions that despite the initial successes, there have also been a number of challenges in order to provide mobile-enabled savings for the poor and they have identified several key learnings for similar business correspondent model approaches targeting the poor and the poorest. For example the poor own a mobile phone does not imply that they would know how to use it to. Therefore to ensure the success of such an initiative, it is also very important to provide ‘mobile-literacy’ to its users.
Read the complete article here: Mobile-Enabled Savings via the Business Correspondent Model in India