Leslie Enright, FINCA International Rome, 17-18 November 2011

Enabling Affordable Remittance Services Using Card-Based Technology

FINCA Uganda

Remittances and Microfinance Networks

FINCA Overview890,000 clients in 21 countries with a loan portfolio of half a billion

Latin America

Key Statistics • Number Active Borrowers 51,967• Outstanding Loan Portfolio $14.9 million • Average Loan Size $344• Number Depositors 86,608• Portfolio at Risk + 30 days 1.56%

Key Initiatives• Micro-Energy Loans• Savings• Youth-focused savings + financial literacy • Domestic Remittances • Innovative Delivery Mechanisms: branchless banking: smart cards, ATM/POS

FINCA Uganda

FINCA UgandaBranchless banking as a vehicle for remittance transfers

Latin America

What is it? • FINCA Point of Sale devices placed in Satellites (vans or micro-branch) or Agents (merchants, air time resellers, retail chain stores, etc.) that are recruited and managed by FINCA

• Clients are given FINCA Access Cards to use at POS locations. Goal is to create point of access for customers close to home

Business Case

• Lowers cost/ transaction - allowing FINCA to service low-balance accounts profitably

• Increased convenience and security for clients

Transactions possible

• All transactions except account opening and loan applications

FINCA Uganda improved access to affordable domestic, account to account remittance and savings services for low-income Ugandans in rural areas through the implementation of a pilot project that utilized Point of Sale (POS) technology and bank cards.

Substantial uptake and usage of services • 30,000 transfer and savings transactions recorded

• 17,500 deposits with an average deposit amount of $90• 3,900 withdrawals with an average transaction size of $185• 7,300 transfers with an average transfer of $2

• 3,600 new savings accounts opened at POS outlets, with $133,695 in savings mobilized

**Updated as of Oct 2011

What we achieved

What we achieved

The pilot project has realized the following benefits:

• Introduced new, low cost, secure services to unbanked clients, some of whom opened savings accounts and used transfer services for the 1st time (60%)

• Increased ease with which rural clients can access formal remittance services (four new underserved areas)

• Provided clients with the ability to receive remittances in a savings account, so that they have a safe place to keep their transfers and can manage their funds

What we achieved

• Development of a replicable, low cost model for scale up throughout Uganda and in other African countries (36% cheaper vs. a full branch model)

• The pilot allowed FINCA to use POS technology to conduct “test and learn” activities in branchless banking and find business models to expand outreach at lower cost (i.e., placing POS at third party merchant agent outlets that are located near customers in order to further increase access to financial services).

Key success drivers

• Intensive marketing and customer outreach efforts• The delivery of cards to clients in the field via customer care

officers in pilot phase, enabling clients to activate their cards on site

• Intensive training in POS technology by FINCA staff

• FINCA hired an external consulting firm to develop operational and systematic IT policies and procedures to minimize the possibility of fraud and protect customers’ data

Key success drivers

• The possibility to cross-sell -- clients felt savings was a gateway to obtaining credit

• Biometric technology (fingerprint) provides increased security and is more user-friendly for clients than using PIN

• Real time transaction processing of POS meant all transactions were authenticated in real time thus increasing security and allowing better servicing of savings clients

Training in Point of Sale (POS) Busia, Uganda

POS and personalized bank card Busia, Uganda