WSBI's Journey in Making Small Scale Savings Work
WSBI member research suggested back in 2003 that savings banks are large providers of financial services to all socio-economic segments, even the very poor, with an estimated 1.1 billion out of 1.4 billion accessible (low cost/low average balance) global savings accounts managed by WSBI members. Throughout the early 2000s, WSBI continued supporting the crucial role that savings banks play in providing accessible financial services worldwide, and a concept was developed which led to the signature of a $20 million grant agreement with the Bill & Melinda Gates Foundation in 2008 with an ambitious target of providing 5-10 million people living on less than $2/day with a savings account by working with ten of WSBI’s member banks.
Widespread dormancy at the start of the program placed a challenge to the program’s ambitious quantitative targets, nevertheless the goal of doubling the number of accounts for the poor has been achieved at the six banks that have sustained projects for the whole life of the program – ABB (Morocco), BTN (Indonesia), Sistema Fedecrédito (El Salvador), KPOSB (Kenya), PBU (Uganda), TPB (Tanzania) – with a wealth of experience gained and foundations laid for taking those lessons to scale. Growth at the banks continues, having turned a highly dormant customer base into an active one (on a six-month definition) with almost all of the improvements coming from modest turnover, low-balance savings accounts and a real change in mindset at the participating banks.
Starting with an extension of their distribution channels through agents and adding POS enabled e-payments to the traditional over the counter business, the report describes how participating banks moved to more digital means of payments through mobile and into linkage banking with informal village groups by addressing pricing and proximity challenges. In order to create a sustainable business case with high volume transactions the report describes how the banks widened their focus to better understand what makes poor people transform use of savings accounts into real usage, to make better use of technology to reengage customers, deploy small and big data analytics at the banks and apply co-creative techniques and household level research to tailor their service offer to the needs of the poor.