CGAP Country-Level Savings Assessment: Bosnia & Herzegovina

How to improve formal sector savings in Bosnia-Herzegovina?
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This report discusses the Savings Initiative developed by CGAP in Bosnia-Herzegovina. It identifies its following features:

  • Goals:
    • To gather and disseminate knowledge about small-balance savings mobilization;
    • To analyze the constraints and opportunities at country level.
  • Methodology:
    • Analysis of the financial system at the micro, meso and macro levels;
    • Interviews;
    • Focus group discussions with microfinance credit organizations (MCOs).

The report finds that:

  • Not all the money is in the banks;
  • Bank deposits are high when compared to neighbouring countries;
  • An estimated 50% of the money entering the country moves through informal channels;
  • A definite demand for bank accounts exists.

The report identifies the following challenges in reaching the unbanked:

  • At the client level-lack of trust and financial education;
  • At the institutional level-lack of:
    • Physical access,
    • Appropriate products for small-balance depositors,
    • Customer service.
  • At the meso level-lack of:
    • Local resources for training and technical assistance,
    • Financial infrastructure.
  • Weakness at the policy level.

The report recommends the following areas for exploration:

  • Financial education, which focuses on savings, for low-income clients;
  • Market research to understand the needs of low-income people;
  • Development of products and services for the low-income market;
  • Expansion of the e-payment infrastructure;
  • Policy dialogue between policy makers and MCOs.

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