ABSA: Enablement of Community Banking
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Project Title | Point Of Sale Enablement of Community Banking project |
Project Partners | N/A |
Location | Run out of head-office (Gauteng); piloted in the Northern KwaZulu Natal |
Funding | Business Trust: R1,998,750 |
ABSA: R6,245,000 | |
Project Challenge
| When low-income and poor people interact with banks the costs to both parties are quite high. For the low-income person it entails travelling to a bank point of presence and also facing high cash handling fees due to the reality of a large reliance on cash as means of transacting of poor people. For the bank the numerous small transactions bring high costs per unit, and it is expensive to establish a physical network that can handle these cash based interactions when the volume of transactions cannot carry the physical presence in the form of a branch. However, international examples exist where banks work through agents, called correspondents where the correspondents then handle the cash transactions. The POS enablement of community banking project (PECB) project aims to provide access to basic financial services to the poor and low income through a network of correspondence bankers in South Africa?s rural areas and selected urban areas. The PECB project will work with established and trusted points of presence where the correspondent have cash handling facilities and can take cash deposits and disburse cash on behalf of ABSA, decreasing the transaction costs of both clients and the bank to an affordable level, and thus furthering financial inclusion and the ability of ABSA to interact with poor clients on a profitable basis.
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Expected Project Impact
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