Postal Financial Inclusion

Mayada El-Zoghbi

October 24, 2013 | Geneva

Introducing CGAP

Member-governed global

partnership of donors to

advance financial access for

the poor.

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CGAP: Advancing financial markets to serve the poor

- Research

- Experimentation

- Knowledge dissemination

Focus on Tunisia – Postal network has significant infrastructure

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330 350

1030

1755

3198

3754

YEMEN JORDAN TUNISIA MOROCCO ALGERIA EGYPT

Commercial Branches

Postal Branches

MFIs• 25% of Tunisians saved

previous year (36%

worldwide; 20% MENA)

• 5% saved in formal

institution (22%

worldwide; 5% MENA)

• Already serves low

income clients

• Trust (savings)

• Large network

• Rural presence

• Resilient to crisis

• Strategy & governance

• Image

• Marketing / outreach

• Product development

• Information systems

• HR systems and

management

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Postal Network in Tunisia: Key advantages and challenges

Key Advantages Key Challenges

Postal network key player for serving low income segments with

savings & payments; partner with MNOs for mobile money

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• Limited reach

• Many new actors

• Regulations allow credit only

MFIs

• Extensive reach

• Savings and payments

• New products with Tunisiana & Visa

Postal Network

• Significant potential, lowest cost

• Regulations limit to via Bank/Post only

Mobile Banking

• Significant political attention & gov’t subsidies

• Subsidies distort market for other providers

BTS/AMCs

95.38% of

population with

mobile phone

access

Large percent

of population

with account

at Post

2% of

population

(Approx.

230,000 clients)

2% of

population

(210,000

clients as of

Dec 2010. )

Partnership? Partnership

La Poste Tunisienne at a crossroad

• Wants to get into the credit business by creating subsidiary MFI in Tunisia as

income earning strategy and to maintain client loyalty.

• Business case for creating new MFI owned by La Poste is weak.

1. No capacity for credit delivery or risk management systems.

2. Market will quickly saturate with credit providers (insufficient demand).

Potential to distort market is high.

• What should La Poste Tunisienne do now?

1. Balance what is good for La Poste versus market reality.

2. Develop an informed strategy that builds on its advantages and work to

address challenges. Income can be earned through other services.

Improving these services should be the immediate priority.

3. Should explore how to build its capacity over time on the credit delivery

side. Start with partnership model with those that already have experience.

4. Creation of a “Bank” may not be the ultimate objective given market size

and priorities for Central Bank in Tunisia. Politics are key here!

Toward a vision for effective financial services delivery for

La Poste Tunisienne

Needs to choose a model based on current situation

Needs government commitment & buy-in

Needs to advance its model as it gains experience

Challenges:

- Ordering of steps

- Management incentives

and timeline

Step 1

Step 2

Step 3

Role of Postal Networks to Advance Financial Inclusion

Key Lessons Beyond Tunisia

• Postal Networks have a key role for savings, domestic

payments including G2P and remittances

• Big question on credit delivery – answer depends on

market conditions and specific strengths and

weaknesses of postal network

• Partnership models hold significant potential for win-win

scenarios on credit but also for other financial services

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Advancing financial access for the world’s poor

www.cgap.org 10