Location-allocation problem for banking correspondent services : the colombian urban market case

Banking correspondents are a channel through which third parties operate on behalf of a bank, under a contract authorising the provision of some banking services. This model has been implemented extensively in developing countries, as a channel to increase financial inclusion by bringing financial products and services closer to marginalised populations. However, there is a lack of studies on the criteria employed by banks when selecting retailers to turn into banking correspondents (BC), in turn preventing the channel from offering a service portfolio adequate to the capacities of the retailers providing this kind of services, affecting the profitability and sustainability of the channel. The current research parted from the agency theory, which allowed to understand the relationship between the parties involved in the delivery of BC services, seeking to boost financial inclusion in Colombia through the development of the BC channel by solving the problem of location and portfolio allocation for retailers acting as banking correspondents in Colombian urban zones. It parted from the case of Bogota, where improvements were achieved in the selection of retailers and portfolio allocation, thus enhancing the relationship between agents, allowing banks to select banking correspondents and allocating them a particular service portfolio, while transaction volumes and channel profits are maximised. This was done through the development of a methodology comprising five stages, namely: (a) the development of a taxonomy on network integration models and financial services; (b) the development of a taxonomy on the strategies of small and medium retailers that could be selected as banking correspondents; (c) the validation of both taxonomies through cluster analyses; (d) validation of the resulting classifications through an ANOVA and a Kruskal-Wallis H test; and (e) the elaboration of a chance-constrained programming model that uses the elements built and validated in the formers stages. A classification of retailers was obtained from factors related to their operational and business strategies, as well as a classification of banking correspondents based on their service portfolios. It was also noted there is a significant relationship between the groups from both classifications, which led to the chance-constrained programming model being run on a sample of retailers in Bogotá, located at the borough of Suba. The model enabled to select those retailers best suited to become banking correspondents, determining the number of transactions according to their constraints in terms of retailer capabilities, banks and the environment, while estimating the expected income from these banking correspondent operationsTesi

Bridging the ICT4D Design-Actuality Gap: “Human ATMs” and the Provision of Financial Services for “Humble People”

Most challenges in ICT for development (ICT4D) projects can be related to differences in perceptions of systems developers and their actual users. Such design-actuality gaps exist both because designers take an uninformed stance towards the user context, and also because problems that ICT4D projects address are nested in systems whose interplay is nearly impossible to predict. Although gaps are inevitable, users are not passive recipients whose only choices are to accept shortfalls in design or reject ICT4D technologies. Rather, users may act to remedy shortfalls through system work-arounds. In this paper we investigate the design use gap in the Brazilian correspondent banking model, an ICT4D project in which local small businesspeople interact with social, financial, government, and technical systems to provide financial services mostly for poor populations. Our findings suggest that correspondents’ acts to alter the financial and social systems proved sufficient to permit success of the project. Our results point to the importance of taking into account user actions and the separate roles of individual systems when designing ICT4D projects and theorizing their performance

Role of Information and Communication Technologies (ICT) in improving microcredit : the case of correspondent banking in Brazil

Copublished with the École des Hautes Études Commerciales de Montréal (HEC-Montréal

Identify and Rank the Factors Affecting Customer Satisfaction of E-Banking Services Using Mixed Method

Due to the changing world of banking on traditional banking to e-banking Published in the last decade to institutionalize this type of service in this country need to make in order to create customer satisfaction and loyalty; it is unavoidable to electronic services. In this research we have tried to by a qualitative approach - little to identify the components of e-banking services should be customer satisfaction. In the qualitative focus groups comprised of experts in the banking industry and academia with bank customers to identify the indicators used. And indicators extracted through cluster sampling among 708 bank customers in the form of questionnaires were distributed in Tehran, Using exploratory factor analysis of the five factors of usability, efficiency, security, and web site image is extracted. Also used the Friedman tests to rank the components are zero sums paid by the customer. Key words: Electronic banking; Usability; Efficiency; Security; Image; Websit

Um Olhar Retrospectivo sobre os Correspondentes Bancários: sete notas para uma história do branchless banking brasileiro

O artigo reúne sete notas, escritas entre 2007 e 2010, sobre o surgimento e desenvolvimento dos correspondentes bancários (CBs) como importante canal de distribuição de serviços financeiros no Brasil. Ao fazer isso, mostra como ele cresceu na esteira de políticas públicas de inclusão social e financeira

Determinants of bank adoption of branchless banking innovations: evidence from Malawi

The research investigates the drivers of bank adoption of branchless banking innovations (BBI) in Malawi. The interest in this investigation stems from the potential of BBI to contribute to solving some of the barriers to financial inclusion, a significant challenge for most African countries. However, due to data accessibility challenges in developing countries, much of the existing empirical literature on the financial services providers' side of BBI has focused on developed and emerging economies. Leveraging a unique dataset of Malawi's banking sector made available by the financial sector regulator, the research examines more dimensions of BBI than have most previous studies. The study digs further into the drivers of BBI by drawing a distinction between physical and remote BBI, a novel distinction in this field of research. The study adopts multiple econometric models and establishes regulation and bank size as the key drivers. Firstly, given the dynamic nature of innovation and risk, bolstering the relevance of regulation of BBI in helping institutions to manage innovation related risks requires an understanding of the unique risks that are faced in the local context. As BBI transcends many sectors, policy recommendations hinge on increased collaboration between the different sectoral regulators of BBI and the regulated institutions in the BBI ecosystem. Secondly, small banks are found to be rapid adopters of both physical and remote BBI. Scaling up BBI in the face of financial stability considerations therefore requires re-opening the banking sector to smaller financially sound institutions. Divergent findings on the impact of branch intensity on adoption of different forms of BBI are another crucial finding with important lesson for bank strategy. The positive association between branch intensity and physical BBI indicates that banks with extensive networks of branches can leverage their branding and physical presence to enhance financial inclusion among low-end retail consumers using physical BBI. On the other hand, banks with a small network of branches would benefit more from remote BBI strategies. In terms of bank ownership, the findings that government ownership in banks has a positive impact on the adoption of only some forms of BBI and a negative impact on other forms do not provide strong support for scaling up BBI strategy through the ownership channel. The findings that foreign ownership and BHC membership’s beneficial effects on BBI adoption emanates from the proliferation of small banks, that are rapid adopters, strengthens the case for further opening the sector to bolster competition

Explaining the Origins and Evolution of the Global Financial Inclusion Agenda

The idea of “financial inclusion,” understood as the access to and use of a broad range of retail financial services (including bank accounts, payment services, credit, and insurance) by everyone in society, emerged as a global priority in the late 2000s. Financial inclusion now features prominently in global economic governance and the activities of disparate international organizations, states, businesses, and civil society organizations. This dissertation asks: what explains the origins and evolution of the global financial inclusion agenda? Existing scholarship often emphasizes the interests and power of Western states and businesses, asymmetric debt and power relations, and the centrality of class conflict. In contrast, I offer a more complete explanation by interrogating the agenda’s ambiguity and coalitional politics. Ambiguity is typically conceptualized as a tool deliberately used by an entrepreneur for the purpose of expanding support. I introduce the novel concept of participatory ambiguity, defined as the process by which entrepreneurs and coalition members construct multiple cognitive frames around a central idea. In so doing, I theorize how ambiguity is co-produced by disparate actors who use language (or branding) and creative action to legitimate multiple policies and outcomes and secure space for their own interests. I argue that the origins and evolution of the global financial inclusion agenda are best explained by participatory ambiguity and the specific mechanisms of quantification, institutional layering, and coordination effects. Empirically, I draw on more than 70 interviews and archival documents from three countries (Ghana, United Kingdom, United States), as well as quantitative text analysis on an original collection of 49 national strategies. Further, I combine variation in global support for the agenda over time with a “most likely” country case study (Ghana) and “least likely” issue area (humanitarian assistance). My research identifies how ambiguity mitigated coalitional conflict and enabled the incorporation of key constituencies, specifically those associated with global financial security or financial stability. This dissertation thus contributes to constructivist scholarship on the agency and power of global South actors in global politics, as well as research on the role of ideas and ambiguity in coalitional politics

Local Adaptation of Work Practices: The Case of BancoEstado’s “CajaVecina” Correspondent Banking System

This article contributes to the discussion of everyday domestic finance technologies by looking at CajaVecina, a correspondent banking network coordinated by BancoEstado, a leading Chilean financial institution. Differences in perceptions between actual users and designers of ICT for development projects (ICT2D) emerged from structured interviews with executives of financial intermediaries, customers, and shopkeepers. The extent to which independent merchants operating CajaVecina’s bespoke terminals confront and solve the “design-actuality gap” questioned whether the CajaVecina system enabled neighborhood retail stores to act as a de facto bank branch. Empirical results suggested that was not the case. Instead of following strict contractual behavior, participants in the correspondent banking network addressed a design gap through social interaction and leveraging relationships with repeat customers. This behavior builds on information emanating from what they called “operating quotas.” Operating quotas enabled BancoEstado to diversify risk, document financial services habits, and forecast the performance of merchants (particularly small, independent retail shops). Merchants used trends in operating quotas to tailor services offered through the CajaVecina terminal while aiming to increase the loyalty of trusted customers. These results further the understanding of correspondent banking services aiming to increase financial inclusion by providing evidence of a previously unexplored aspect of these networks, where social dimensions take precedence over economic, financial, and technological aspects

Legal and regulatory aspects of mobile financial services

The thesis deals with the emergence of bank and non-bank entities that provide a range of unique transaction-based payment services broadly called Mobile Financial Services (MFS) to unbanked, underserved and underbanked persons via mobile phones. Models of MFS from Mobile Network Operators (MNOs), banks, combinations of MNOs and banks, and independent Mobile Financial Services Providers are covered. Provision by non-banks of ‘bank-type’ services via mobile phones has been termed ‘transformational banking’ versus the ‘additive banking’ services from banks. All involve the concept of ‘branchless banking’ whereby ‘cash-in/cash out’ services are provided through ‘agents.’ Funds for MFS payments may available through a Stored Value Product (SVP), particularly through a Stored Value Account SVP variant offered by MNOs where value is stored as a redeemable fiat- or mobile ‘airtime’-based Store of Value. The competitive, legal, technical and regulatory nature of non-bank versus bank MFS models is discussed, in particular the impact of banking, payments, money laundering, telecommunications, e-commerce and consumer protection laws. Whether funding mechanisms for SVPs may amount to deposit-taking such that entities could be engaged in the ‘business of banking’ is discussed. The continued use of ‘deposit’ as the traditional trigger for the ‘business of banking’ is investigated, alongside whether transaction and paymentcentric MFS rises to the ‘business of banking.’ An extensive evaluation of ‘money’ based on the Orthodox and Claim School economic theories is undertaken in relation to SVPs used in MFS, their legal associations and import, and whether they may be deemed ‘money’ in law. Consumer protection for MFS and payments generally through current statute, contract, and payment law and common law condictiones are found to be wanting. Possible regulatory arbitrage in relation to MFS in South African law is discussed. The legal and regulatory regimes in the European Union, Kenya and the United States of America are compared with South Africa. The need for a coordinated payments-specific law that has consumer protections, enables proportional risk-based licensing of new non-bank providers of MFS, and allows for a regulator for retail payments is recommended. The use of trust companies and trust accounts is recommended for protection of user funds. | viPublic, Constitutional and International LawLL. D

Rule of Thumb: Mobiles for governance in India

Between 1996 and 2012, India's standing dropped on five of the six indicators of governance developed by the World Bank. Today, with over 900 million mobile phone subscriptions, India's mobile revolution presents an unprecedented opportunity to address this deficit and bring good governance to the farthest corners of the country. Adding 10 mobile phones per 100 people in a developing country can lead to half a point of additional GDP growth per person. Rule of Thumb makes a case for m-governance, and for reimagining the ways in which governments and citizens function, transact and interact with each other. It also explores how, in India and the world over, non-profits and social businesses are marrying the ubiquity of mobile technology with governance systems and processes to produce great benefits for citizens and governments alike. Dasra mapped over 130 organizations and profiled the work of 11 organizations with the most impactful and scalable programs