In the Western world, many people choose branchless banking out of convenience. But in developing countries, people rely on branchless banking because they don’t have access to a brick and mortar bank. One example from the Asia Pacific Economic Cooperation (or APEC) is located in the Philippines.
A shocking 37% of people living in the Philippines do not have easy access to a banking institution. This is largely because the banks are all located in urban areas and there are many people living in rural areas. With the Philippines being a group of islands, limited access to a bank can actually mean the closest bank is on the next island.
What can be done for people living in these situations? Banking isn’t just about having a safe place to store hard-earned salaries. People in developing countries need access to loans to be able to start successful businesses and build lives for their families. Here are some of the ways APEC has tried to reach their customers with effective products and keep their customers and investors safe.
Designing and pricing the services (savings, loan payments, insurance, credit, etc.) for the market is essential. Overpriced services are part of what has made access to banking difficult for so many.
Many central bank circulars have been put in place to protect all parties involved. For example, circulars include regulations to promote consumer security in branchless banking and encouraging rural banks to invest in ATMs.
APEC emphasizes nationalism in their outlook on branchless banking, stating they want to, “to keep the interest of the country at heart, even as the world is becoming flat and inter-connected in terms of operations and business dealings.”
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