Designing savings products to serve low income customers

GAFIS

Expertise Area

All Areas

Client Name

The Bill & Melinda Gates Foundation

Country

Mexico, Colombia, South Africa, Kenya, India

In the GAFIS project, BFA worked with bank executives and staff to design savings products to serve low income customers of five commercial banks in diverse markets with over 256 billion USD in combined assets and over 60 million accounts. BFA developed pro-forma investment business cases for each low income customer segment at individual, portfolio, and institution-wide levels. With BFA’s detailed analysis of products and compatible distribution channel delivery systems, the banks were able to implement targeted, cost-effective pilot programs for the new products and have experienced significant grown in the number of customers and active accounts year over year.

Problem Statement

People living in poverty often lack access to safe, reliable ways to manage the little money they have. As a result, they face de facto exclusion from the financial system the rest of us rely on. The Gateway to Financial Innovations for Savings (GAFIS)—funded by the Bill & Melinda Gates Foundation, fiscally sponsored by Rockefeller Philanthropy Advisors and managed by BFA — set out to answer how banks might change this dynamic by broadening their value proposition to appeal to poor savers while improving their own bottom line.

 


 

The Solution

The GAFIS project aims to leverage the “gateway opportunities” presented by certain existing financial relationships between banks and a large number of the poor in order to offer product innovations that make accumulating savings in a bank account a more attractive proposition for poor clients. Through these innovations, participating banks aim to generate a win-win situation, one in which the business case for serving poor clients is enhanced by strengthening the portfolios of those clients through increase bank savings. GAFIS employed a two-pronged approach that focused on both consumer and bank concerns, finding viable solutions that support the needs of both parties, thereby making low-income savings solutions more sustainable in the future.

 


 

Findings and Key Takeaways

  • The project generated over 470,000 new poor savers across all the partner institutions.
  • A robust and effective peer network was set up and leveraged by all partner institutions.
  • Technical assistance in deploying new channels for low income clients was deployed.
  • New knowledge about how to reach low income clients was generated.
  • Better understanding of the challenge of large financial institutions to serve the poor was captured in several outputs

Explore GAFIS

Press Release

Focus Note 1

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Focus Note 2

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Focus Note 3

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Focus Note 4

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GAFIS Presentation

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Updated January 2017