Postal Savings and the Provision of Financial Services: Policy Issues and Asian Experiences in the Use of the Postal Infrastructure for Savings Mobilization

This paper reviews the postal financial systems, including savings product development, investing mobilized funds, receiving overseas remittances and utilizing financial technologies of twelve developing Asian countries.

The paper discusses:

• The advantages of the postal system;
• Factors that contribute to the success of postal financial services;
• Impact of market liberalization upon the changing economies of the posts;
• The current state of postal savings in developed and developing countries;
• Changes in recent decades in policy approaches to post banks and privatization and the effect of these changes on the loss of postal services;
• The experiences of Asian countries in the area of postal services.

It concludes by outlining some considerations for policy reform, which include:

• Governments should determine whether they want a specified set of communications and financial services to be made available nationwide at moderate costs to all users;
• Governments contemplating privatization proposals should understand the social value of the assets they are offering for sale;
• Governments should consider giving continuing incentives to the postal system to actively cooperate in the operations of postal financial services;
• Credit and investment products could be marketed through the postal system;
• General savings promotions campaigns could be undertaken through the postal system;
• A portion of postal savings resources should be placed with qualified microfinance institutions to encourage small scale agricultural and business enterprises;
• Steps should be taken to include more developing countries in the in the international giro systems of Europe, Japan and Korea.