Lecture 21 - Partners at the last mile: retailers, banking agents, and insurance companies. The following will be discussed in this chapter: The last mile, banking correspondents, models of bank-retailer relationships. | PARTNERS AT THE LAST MILE: RETAILERS, BANKING AGENTS, AND INSURANCE COMPANIES Summary of the Last Lecture Service Company Models Financial Subsidiaries Lessons from Downscaling The Last Mile Convenience is an important word in banking, and nowhere is convenience more important than in the BOP market. There are extreme cases, like the Ugandan coffee farmers mentioned in previous lectures The Last Mile who put their lives at risk on the long road between the bank and their village, or South Asian women whose customs discourage them from leaving their homes. The Last Mile The challenge of providing convenience is that conventional bank branches are too expensive to put in every low-income neighborhood and village. The volume of business at such branches does not justify the up-front investment or perhaps even the running costs. The Last Mile As a result, the cost of the last mile or meter has long been one of the great barriers to financial inclusion. In recent years, new models have . | PARTNERS AT THE LAST MILE: RETAILERS, BANKING AGENTS, AND INSURANCE COMPANIES Summary of the Last Lecture Service Company Models Financial Subsidiaries Lessons from Downscaling The Last Mile Convenience is an important word in banking, and nowhere is convenience more important than in the BOP market. There are extreme cases, like the Ugandan coffee farmers mentioned in previous lectures The Last Mile who put their lives at risk on the long road between the bank and their village, or South Asian women whose customs discourage them from leaving their homes. The Last Mile The challenge of providing convenience is that conventional bank branches are too expensive to put in every low-income neighborhood and village. The volume of business at such branches does not justify the up-front investment or perhaps even the running costs. The Last Mile As a result, the cost of the last mile or meter has long been one of the great barriers to financial inclusion. In recent years, new models have begun to claim victory over these barriers. The Last Mile Banks develop branchless banking. Retailers and telecom companies decide to become banks themselves or carry out payment transactions. The Last Mile In the search for ways to meet clients where they are and when they wish, it helps to ask a simple and perhaps obvious question. Who already owns the last mile? The Last Mile Among the answers are post offices, supermarkets, corner groceries, pharmacies, lottery ticket sellers, and gas stations. Such businesses either have a dense network of outlets or are places low-income people already frequent for everyday necessities. The Last Mile Successful examples already exist, from the past or from other countries. For decades, post office savings banks were the only formal banking outlets in villages and hamlets across much of Africa and Asia. The Last Mile And in the developed world, supermarkets have long partnered with banks as ATM locations and checkout counter cash dispensers. The .
