Nearly 1bn use banking
facilities provided by the global postal network but despite having the
largest number of contact points in the world, postal organisations all
over are underutilised as a means of financial inclusion, according to
the Universal Postal Union (UPU).
A UPU study presented at the 25th Universal Postal Congress said only 51 postal operators offered account-based financial services. Even with 660,000 contact points across the world, postal organisations and their financial subsidiaries are a distant second to banks in contributing to financial inclusion.
There are 523,000 bank branches and ATMs in the world, according to the International Monetary Fund. Fifty-one postal operators worldwide held 1.6bn savings and deposit accounts in 2010. With the average postal client holding an estimated 1.5 accounts, this brings the number of people banked to more than one billion, according to the UPU. This figure does not take into account postal banks.
The report recalls that several hundred million people also use the post to make and receive domestic and international transfers or pay government or utility bills, whether or not they hold a postal savings account.
“The postal network offers tremendous potential for fostering financial inclusion,” says Alexandre Berthaud, one of involved in the study. “If only 51 operators offering savings accounts can bank a billion people, then the remaining postal operators of the UPU’s 192 member countries, especially strongly populated ones such as Nigeria, Russia, Mexico, Ethiopia and Colombia, could easily provide a gateway to financially include at least 500 million unbanked people directly or through partnerships with banks,” he pointed out.
The findings provide a global panorama on postal financial inclusion. They identify five main categories of business models that posts use to provide financial services.
The report recommends how postal operators could progressively offer financial services.
A few days ago the World Postal Congress adopted a resolution urging member countries to continue developing financial services. It recognised their value to the UN Millennium Development Goal of reducing poverty, as well as helping the growth of small and medium-sized businesses.
During the recent economic crisis, several operators that offer financial services through their financial arms saw the number of customers and new accounts rise dramatically.
The UPU helps its member countries to introduce or develop inclusive and sustainable financial services by acting as an information and technical assistance platform for the postal sector. In recent years the UPU has worked closely with a number of lending institutions and donors to make postal financial services accessible to the most disadvantaged populations.
Financial services accounted for almost 12% of global postal revenues worth $304bn according to 2011 UPU statistics. Financial services in the Asia-Pacific account for almost 61% of postal operators’ revenues, 27.5% of revenues in Arab countries, and 27% in European countries and those from the Community of Independent States.
With the decline of letter-post volumes, financial services offer new growth opportunities for postal services, and they are gaining ground as Posts consider strategies to diversify the business.
The UPU report states that, while Posts may seem an unlikely champion in the fight against financial exclusion, the facts show them as “a key lever in advancing the inclusion of unbanked populations into the formal financial system”. Indeed, postal operators’ business model of large volumes and low costs combined with its universal service obligation make the postal network a worthwhile ally in the global fight again financial exclusion, concludes the report.
The research is based on the answers of 123 countries to a UPU questionnaire and lessons drawn from field missions.
The report identifies five categories of business models used by postal operators to participate in financial inclusion. The models go from acting as a cash merchant for government and financial services providers, present in 85% of countries, to having fully licensed postal financial services, such as their own postal bank, which is the case for only 10% of countries.
An operator’s success in implementing financial services depends on 10 key issues, including connectivity, financial capacity, automation, trust, and the existence of a legal and regulatory framework, among others, states the report.
Using capacity, automation and legal and regulatory framework as the three key indicators for success and giving them a specific weight, UPU researchers developed a success factor index and global ranking of countries evaluated.
According to this global ranking, Morocco came out on top as the developing country with the most potential for providing financial inclusion, followed by Serbia, Belarus, Malaysia, Indonesia, Tunisia, Kazakhstan, Brazil, China and Namibia.
The UPU hopes the index will be used to inspire operators and governments to utilise the postal network as a facilitator of financial inclusion.
A UPU study presented at the 25th Universal Postal Congress said only 51 postal operators offered account-based financial services. Even with 660,000 contact points across the world, postal organisations and their financial subsidiaries are a distant second to banks in contributing to financial inclusion.
There are 523,000 bank branches and ATMs in the world, according to the International Monetary Fund. Fifty-one postal operators worldwide held 1.6bn savings and deposit accounts in 2010. With the average postal client holding an estimated 1.5 accounts, this brings the number of people banked to more than one billion, according to the UPU. This figure does not take into account postal banks.
The report recalls that several hundred million people also use the post to make and receive domestic and international transfers or pay government or utility bills, whether or not they hold a postal savings account.
“The postal network offers tremendous potential for fostering financial inclusion,” says Alexandre Berthaud, one of involved in the study. “If only 51 operators offering savings accounts can bank a billion people, then the remaining postal operators of the UPU’s 192 member countries, especially strongly populated ones such as Nigeria, Russia, Mexico, Ethiopia and Colombia, could easily provide a gateway to financially include at least 500 million unbanked people directly or through partnerships with banks,” he pointed out.
The findings provide a global panorama on postal financial inclusion. They identify five main categories of business models that posts use to provide financial services.
The report recommends how postal operators could progressively offer financial services.
A few days ago the World Postal Congress adopted a resolution urging member countries to continue developing financial services. It recognised their value to the UN Millennium Development Goal of reducing poverty, as well as helping the growth of small and medium-sized businesses.
During the recent economic crisis, several operators that offer financial services through their financial arms saw the number of customers and new accounts rise dramatically.
The UPU helps its member countries to introduce or develop inclusive and sustainable financial services by acting as an information and technical assistance platform for the postal sector. In recent years the UPU has worked closely with a number of lending institutions and donors to make postal financial services accessible to the most disadvantaged populations.
Financial services accounted for almost 12% of global postal revenues worth $304bn according to 2011 UPU statistics. Financial services in the Asia-Pacific account for almost 61% of postal operators’ revenues, 27.5% of revenues in Arab countries, and 27% in European countries and those from the Community of Independent States.
With the decline of letter-post volumes, financial services offer new growth opportunities for postal services, and they are gaining ground as Posts consider strategies to diversify the business.
The UPU report states that, while Posts may seem an unlikely champion in the fight against financial exclusion, the facts show them as “a key lever in advancing the inclusion of unbanked populations into the formal financial system”. Indeed, postal operators’ business model of large volumes and low costs combined with its universal service obligation make the postal network a worthwhile ally in the global fight again financial exclusion, concludes the report.
The research is based on the answers of 123 countries to a UPU questionnaire and lessons drawn from field missions.
The report identifies five categories of business models used by postal operators to participate in financial inclusion. The models go from acting as a cash merchant for government and financial services providers, present in 85% of countries, to having fully licensed postal financial services, such as their own postal bank, which is the case for only 10% of countries.
An operator’s success in implementing financial services depends on 10 key issues, including connectivity, financial capacity, automation, trust, and the existence of a legal and regulatory framework, among others, states the report.
Using capacity, automation and legal and regulatory framework as the three key indicators for success and giving them a specific weight, UPU researchers developed a success factor index and global ranking of countries evaluated.
According to this global ranking, Morocco came out on top as the developing country with the most potential for providing financial inclusion, followed by Serbia, Belarus, Malaysia, Indonesia, Tunisia, Kazakhstan, Brazil, China and Namibia.
The UPU hopes the index will be used to inspire operators and governments to utilise the postal network as a facilitator of financial inclusion.
Source : http://www.gulf-times.com
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