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David Roodman's Microfinance Open Book Blog


CGAP has released what appears to be the most exhaustive survey yet of the rapidly changing state of high-tech branchless banking in developing countries. A couple of weeks ago, Mark Pickens of CGAP blogged some results:

  • 37% of active clients were previously unbanked. Put in terms of numbers of people, each service we studied brought 1.39 million people into the formal financial system for the first time. So, branchless banking does reach some not so small numbers of people.
  • But how does that rate to other providers also aiming at the mass market of unbanked? In 5 of the 7 countries, branchless banking serves more previously unbanked people than the largest MFI.
  • And branchless banking is scaling faster than MFIs. The branchless banking services needed 3 years to surpass the outreach of the largest MFI in the same market, which on average operated for 15 years. In other words, the branchless banking services we studied are growing five times faster than the most successful MFI in the same market.
  • Two important caveats:  we had no data on branchless banking in several markets where microcredit is most successful--e.g. Bangladesh. And we are not saying branchless banking is poised to replace or eclipse MFIs. The payment services branchless banking typically provides are complimentary to microcredit offered by microfinance institutions.


CGD blog posts reflect the views of the authors, drawing on prior research and experience in their areas of expertise. CGD is a nonpartisan, independent organization and does not take institutional positions.