Turning the post office into a force for financial inclusion

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photo by: Amortize, Flickr Creative Commons

In the old times, the post office was the main connector between cities and villages, moving letters and money to every corner of the country, and contributing towards the territorial consolidation of states under construction.

Nowadays in developing countries, the post office is often seen as an old, inefficient, deficit-making, and outdated public service which has not been able to keep up with the evolving markets. It takes some imagination to see the post office as a potential engine for economic growth and social inclusion.

The past decade has, however, seen some extraordinarily successful postal stories in countries such as Brazil or Morocco.  Those cases show that when postal financial inclusion works, the impact is massive and reaches to the very bottom of the pyramid.

In Brazil, Correios (the postal operator) and Bradesco’s (the largest private retail bank) strategic partnership started in the early 2000s and resulted in 11 million new banking accounts opened over 10 years.   In Morocco, the proportion of the population with a bank account rose from 34% to 47% when the 4 million postal account holders became postal bank clients with the creation of Al Barid Bank (postal bank), a subsidiary of Poste Maroc in 2010. Since then, the postal bank has opened close to 500,000 accounts per year and now has more than 6 million accounts. For the postal customers, the main difference lays in the ability to borrow from Al Barid Bank, something that they could not do before with Poste Maroc, as it was a deposit-only (non-banking) financial institution. 

When it comes to remittances, post offices can be a powerful alternative to money transfer operators, internationally and domestically. IFAD is cooperating with the post offices in some countries to help move money towards rural and remote areas at a fraction of the price most private money transfer operators are charging.

The most striking feature of postal financial inclusion, however, has come out of the 2011 Global Findex  data, which shows that postal financial inclusion reaches the poorer, older, less educated and unemployed people, at the very bottom of the pyramid.

Experts have dissected what it takes to turn the “good old post office” into a financial inclusion tiger.   Reforms must be comprehensive, covering policy, regulatory and institutional framework, governance, capacity building, financial management, marketing and product portfolio, and information and communication technologies (ICT).  Business models vary from one country to the next:  the African Union Commission identified four main business models, while a Universal Postal Union (UPU) study analyzed six main models with more or less private sector participation. An increasingly critical factor that enables successful turnaround reforms are ICTs, which allow interconnection between post offices, improved management and information system (MIS) and governance, and more efficient marketing tools.

So it is a complex endeavor, nothing like a “quick win”. But check the UPU’s global ranking on postal financial inclusion potential, where around 20 countries rank “high” on the Success Factor Index – maybe one is a country in which you are involved? Just to give you a taste, Burundi, Colombia, Kazakhstan, Mauritius, Namibia, Senegal, Serbia, and Tunisia are all on the list. In these countries, the post office can provide the poor with greater opportunities; it can be a connector again.


"Postal networks in the MENA: Dinosaurs or new tigers of financial inclusion?” 2011, CGAP and PlanetFinance
“Postal financial services in Africa: Strategies to increase the inclusion of low-income populations.”  2012, African Union Commission
“Global Panorama on Postal Financial Inclusion: Key Issues and Business Models.” 2012, Universal Postal Union



Isabelle Huynh

Senior Operations Officer

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