PAPUStrategy Conference

Berne, SHApril, 2015

Financial inclusion: An offer for a strong growing postal sector

Dr. Enock Kinara, PMG - PCK

Traditional Postal Financial Services• Postal Operators (POs) have over time engaged in

traditional Financial Services which included:– Money transfers (including ETFs)– Money Collections / disbursements

• Government / Institutions / Agencies

• This services were manual and relied on physical locations which POs had an advantaged due to USO mandate (large physical branch network)

Need for Financial Inclusion in Africa• Traditionally African countries did not develop

uniformly creating a big financial divide between rural and urban areas

• There has been need for financial inclusion by these Governments for various reasons amongst them:-– Tapping in rural potential– Citizen rights and equalization– Formalization of the informal sector of economy etc…

Postal Operators as a natural fit• Postal Operators are a natural fit due to various

factors – key amongst them:-– Still has wide area networks that can provide physical

point of contact for financial transactions (e.g. customer authentications (KYC))

– Has TRUST from citizens– Experience in cash management gained over time– An impartial facilitator for the various financial

institutions– Ability to lower the cost of transactions

Operators Positioning

• Investment in enabling viable infrastructure (Hardware & Software)

• Partnership with Government Services• Create Networks beyond boarders• Petition for key success factors from

Governments

Enabling InfrastructureInvest in technology that will lower the cost of automation and position Postal outlets & Agencies as a supermarket of Financial Services – Agency services (impartial and affordable financial inclusion)

Government Partnerships• Position themselves as a

preferred Government partner in its financial programs e.g. Huduma Centers in Kenya

• Be able to facilitate private players in issuance of financial inclusion instruments e.g. payment cards through co-branding hence lowering barriers to SME / private sector participation

Post financial network – beyond boardersPosts have the excellent opportunity especially in Africa to create an financial network for the unbanked through:- • Integration of IFS• Establishment of

regional hubs for switching• Avoid infrastructure &

resource duplication

Critical success factors• Petition the Governments for:-– Enabling Legislation – Facilitate convergence of virtual & physical

networks through the National Addressing Systems

Critical success factors• Redefine Universal Service Obligation (USO)– Provision of minimum affordable broadband /

data to citizen

• Aggressively address the digital divide through USF and equalization funds

• Encourage Shared infrastructure – Avoid resource duplication – Lower networks operational costs

PAPUStrategy Conference

Berne, SHApril, 2015

Financial inclusion: An offer for a strong growing postal sector

Dr. Enock Kinara, PMG - PCK

Discussions