Building Sustainable Business Models for Providing Financial Services to the Poor

This case study analyzes Cashpor's Business Correspondent (BC) model and describes the infrastructure used to deliver the BC services. It studies the financial viability and strengths of Cashpor's business model and attempts to arrive at some general principles that BCs could adopt in order to attain financial viability. Findings include:

• Financial viability is a major concern for BCs as its facilitation requires a long gestation period. Leveraging existing infrastructure, rather than creating a parallel BC infrastructure helps not only in keeping the fixed costs low but also proves beneficial in acquiring customers for the savings operation;
• In order to attract clients it is important to focus on improving the customer experience and create customer confidence in the BC model;
• Capacity building of BC staff is essential, and staff capacity building was the biggest cost component for Cashpor;
• Given that the BC model is cost intensive and delivers low returns in the initial years, support from other key these stakeholders such as banks and policy makers is critical for the BCs to meet their costs and become sustainable.