APFSI
The African Postal Financial Services Initiative (APFSI) was a unique broad-based partnership led by IFAD's Financing Facility for Remittances, and bringing together the World Bank Group, the Universal Postal Union, the World Savings and Retail Banking Institute and the United Nations Capital Development Fund, and was co-financed by the European Union. The APSFI programme demonstrated and proved that postal networks can leverage on their existing infrastructure and payment systems to extend the financial ecosystem in rural areas, providing low-cost, basic and transaction-based services to small farmers and poor households, through appropriate partnerships with the private sector.
Reduce the costs
Reduce the costs of remittances to and within the African continent. This is the single highest impact method to keep funds in the hands of remittance senders and their families. For every 1 per cent reduction in the cost of remittances, migrants from Africa and their families will save up to US$500 million.
Reduce transaction times
Reduce transaction times of remittances to and within Africa. While price is an important determinant in the choice of a particular service, speed and convenience are even more significant. Post offices must be reliable, rapid and convenient, and paper-based processes do not meet this standard of service.
Extend network in rural areas
Broaden the network of rural locations through which remittances can be picked up. The cost of remittances to rural areas is significantly higher than to urban areas. By enabling post offices to provide financial services, financial access is brought closer to rural customers so they have less distance to travel.
Extend range of financial services
Deepen the range of financial services provided in rural areas. True access to finance is far broader than access to remittances alone. Savings, loans and insurance products help migrant workers and their families protect themselves from adverse shocks and enhance their long-term financial independence.
Programme Activities
Strategic market data allow for further market depth and width, and targeted capacity building to key stakeholders for remittance data creation and use.
Increase market competition Expand access to remittances through close cooperation with public and private sectors, and additionally reduce significantly direct and indirect costs, and spur market competition.
Mainstream gender into all activities. Projects focused on targeting women to improve financial inclusion and and financial resilience and empowerment of migrants and women receiving remittances. Promote and support gender disaggregated data and impact analysis.
Support an enabling environment Coherent national regulatory frameworks in both sending and receiving countries can foster competition in remittance corridors and enable safe, cheap and fast transfers.
Coherent national regulatory frameworks in both sending and receiving countries can foster competition in remittance corridors and enable safe, cheap and fast transfers.
Co-finance and promote innovative, replicable and scalable business models and technologies that link remittances to financial services, towards greater financial inclusion.
Collaboration mechanisms in place among central banks, regulatory bodies, the private sector and diaspora communities in sending
and receiving countries; and strengthened capacity to adapt and scale up best practices within an operational framework that allows cooperation among partners.
Outcomes
Reduction in average cost to 4 per cent and below for sending remittances delivered via post offices in Benin, Ghana and Senegal, and close to
5 per cent in Madagascar.
Reduction by 42 per cent in the cost of sending remittances via post offices in the four pilot countries.
An increase of US$35 million in money in the hands of the migrant families between 2014 and 2016 as a result of the cost reduction.
A 60 per cent increase (equivalent to US$232 million) in remittances delivered via post offices in Benin, Ghana, Madagascar and Senegal (from US$383 million in 2014 to US$615 million in 2016).
Increased competitiveness: the market share of the four postal operators in delivery of remittances went up from 8.8 per cent to 13.4 per cent in a US$4.6 billion market.
Post office restyling and new marketing strategies were effective in attracting new customers. Within three months of restyling, transaction volumes went up in the refurbished post offices by around 15 per cent and the flow of money increased by 82 per cent, mainly because more remittance recipients started making use of the post offices.
Access to financial services in rural areas improved, through the digital upgrading of around 260 post offices with computer technology and connectivity.
Improved proximity of post offices to remittance recipients. For 63 per cent of remittance recipients, the post office is within walking distance; out of it, for 42 per cent it is within 10 minutes’ walking distance.
The number of rural access points of formal financial services went up from 2.3 to 2.8 per 100,000 adults in the four countries. Post offices represent 70 per cent of these rural access points.
Rural financial inclusion increased – with a modernized network offering greater access, an expanded portfolio of remittance services, and an extensive range of basic financial services. More than 15 contracts between NPOs and money transfer operators (MTOs) were revised or renegotiated, close to 10 new contracts finalized for remittance delivery, and close to
10 bilateral contracts concluded with other NPOs for new corridors for the exchange of postal money orders, thus broadening the competitive coverage of the corridors.
At least 100,000 previously unbanked adults opened accounts for financial services via the post offices in the four countries.
APFSI’s approach to business development, financial and cash management, communications and marketing integrated in corporate strategies of NPOs. The four NPOs have adapted the APFSI approach internally and continue with restyling of their post offices, along with upgrading of IT equipment, organizing broadband connectivity and expanding the range of products and services offered.
More than 160 postal managers and trainers trained in the four NPOs, enabling them to further extend their knowledge and skills to postal staff for the provision, management and delivery of financial services via post offices.
Increased revenues for the four NPOs, further stimulating investment in improving the remittance services provided via post offices.
A significant variety of knowledge products produced for the use of other NPOs interested in delivering remittances, and to enhance awareness on the potential of postal networks for rural development. These products include a baseline survey on the client perspective, an overall assessment of the role and potential of African postal operators in the remittance market, various working papers, market research methodologies, branding and corporate identity guides, business planning, business modelling, financial planning, and cash and liquidity management.
Seven additional NPOs supported in strategy development and resource mobilization activities, through the medium-term road maps on “Expanding the role of postal networks in delivery of remittances and access to financial inclusion in rural Africa”, prepared in close collaboration with each postal operator.
Increased awareness for more than a thousand senior policymakers, officials of development institutions, postal, banking, remittance and FinTech executives, financial regulators (central banks), communications regulators and development finance institutions in more than 30 other African countries on the potential of postal networks in financial inclusion and best practices in development.
Active coordination with other donor-funded programmes supporting postal networks.
