By our reporter
PostBank Uganda has been recognised as the best bank in promoting financial inclusion in Africa.
PBU emerged the continent’s best among members of the World Savings Banks Institute (WSBI). The bank stood out for reaching financial inclusion goals for the period 2014-2017, enlisting a million accounts, buoyed by people who were previously unbanked.
The announcement was made during the WSBI Africa regional meeting that took place in Tunis recently. Mr Alex Kayaayo, PBU’s Executive Director received the accolade in Tunisia’s capital on behalf of the bank.
In three years, PBU has linked over 30,000 groups with membership of over 500,000 with over Sh15 billion of stable savings. According to the bank, the number of accounts has grown from 400,000 to 1,000,000 in this period.
The journey
Post Bank Uganda was involved in the WSBI-Gates Doubling the savings account project since 2009. The bank received USD500,000 from WSBI in support of taking financial services to the rural poor.
After a market research was carried out by Cream Uganda, a local NGO, results indicated the existence of a bankable market segment organized as saving groups.
PBU through partnership with Care International created a savings product that had the same features with a Savings BOX. Special staff known as VSLA officers were recruited to manage the bank relationship with the savings groups.
In 2014, the bank institutionalized linkage banking by creating a division of Linkage and special segment to drive the business of Savings Groups. This provided an opportunity for the bank to enhance its strategic focus on the mass market.
A business model based on three pillars was created. The pillars are Affordability, Accessibility and Usability, built through partnerships with both local and international NGOs, to link saving groups to formal banking.
PBU’s business technology department innovated the first Saving Group app that allowed the group access services through the group mobile phone.
Through the support of WSBI gates project, the saving groups received Mobile Phone sets for their mobile banking activities. With
Technology, the bank also was able to open individual group members to own individual accounts linked to their group. This widened the bank’s penetration that saw increase in accessibility to the products and services.
Currently the VSLA are being complemented with business development strategies like group loans, phone banking and village/Agency banking to meet the increasing needs of members.
At the centre of the VSLA concept are women, who have increased from 16% of the total customers of the bank, to 37%. The product has therefore addressed gender inequality and vulnerability between women and men with regards to access to credit.
PBU says it has succeeded because of partnerships with such as with Care international, Catholic relief services, NCBS Clusa, Mercycorps, Goal International, Buyobo Women Association, NUSAFU 1 and 2
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