Financial Inclusion Across the World

Analysis of Various Business Models
by Prathima Rajan,  Sreekrishna Sankar, July 5, 2011
Industry Trends
Global, Asia-Pacific, EMEA, Latin America, North America


Financial inclusion has shifted from being a social objective to a viable business opportunity across the world. Enterprises have identified three business models: bank-driven strategies, nonbank-driven strategies, or hybrid models. Different geographies have adopted the model that best suit them based on various macroeconomic factors.

This report, Financial Inclusion Across the World: Analysis of Various Business Models, analyses the three core models in the inclusion strategy. It debates the pros and cons of each model and looks at the factors driving adoption of each model across geographies. Celent chose Brazil, Mexico, Kenya, India, and South Africa to understand the subtle differences as well as the broad similarities in the strategies adopted and the success factors. Also, Celent identifies regulation and technology as the two pillars sustaining the progress of inclusion.

Celent acknowledges the geographical context as the key influence in financial inclusion strategy, and hence declares that a “one solution fits all” does not exist. Celent advises against the mere adoption of a successful inclusion model but rather suggests the formulation of regulations and adoption of technology based on the local environment. Hence technology is an enabler in different modes like mobile phone, handheld devices, card-based, and last but not least business correspondents or agents depending on the country’s strategy. Different business models use various modes of technology to ensure optimum out- reach depending on the sophistication, adoption, and use.

“Development of the right regulatory environment is a key success factor in financial inclusion. A blueprint is a must for a structured approach. Most of the countries have strategy documents in place, but some- times the documents are not fully formed and do not cover all aspects. Consumer protection regulations, as well as reduction of risks emerging from the broadening of the service provider list, have to be chalked out.” says Sreekrishna Sankar, Celent analyst and coauthor of the report.

Prathima Rajan, Celent analyst and coauthor of the report, comments on the importance of technology decisions in successful financial inclusion. “Evaluating the right technology is the most important factor for a successful inclusion strategy. This includes cost-benefit analysis of various technology choices, analyz- ing the security aspects of the solution, and putting consumer protection plans in place.“

The report also provides financial inclusion success stories around the world and examines the business model / strategy that has enabled financial inclusion in a big way.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
Tel: +1 212 345 1366

Europe (London)
Chris Williams
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
Tel.: +81 3 3500 3023

Table of Contents


Executive Summary




Financial Inclusion Strategies


Geographical Context—The Key Influence on Inclusion



Penetration of Traditional Banking



Usage of Banking Services


Molding an Inclusion Strategy—Technology and Regulatory Decisions



Regulation—Congenial and Yet Protective





Lessons from Initiatives Around the World



Brazil: Banking Correspondents and Leveraging Public Networks to Access New Customers



M-PESA: Kenya’s Nonbank Initiative



India: FINO—Technology and Service Delivery for Bank Collaboration



Philippines—A Flexible, Hands-On Regulation-Enabled Market


Looking Forward


Appendix—Peer Countries



Brazil—Agent-Driven Growth



India—Hybrid Model



Kenya—Driven by Nonbank Model



Mexico—Bank-Driven Approach



South Africa—Bank-Driven and Nonbank-Driven Growth


Leveraging Celent’s Expertise



Support for Financial Institutions



Support for Vendors


Related Celent Research


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