Bringing Unbanked Households into the Banking System

This paper states that widely implementing outreach strategy will not guaranty reaching all of the unbanked nor will it succeed in helping all of the ones that it does reach. Nevertheless, even a modest rate of success could mean significant improvements in the quality of life for hundreds of thousands lower-income families. It presents a strategy that banks can use to help "unbanked" households join the mainstream financial system. The strategy calls on participating banks to open special outlets that are conveniently located for lower-income households and offer five non-traditional services in addition to traditional consumer banking products. It argues that the outreach strategy advocated is likely to be superior to traditional approaches in four regards:

• Draw more of the unbanked into bank branches;
• Offer them a set of services better designed to meet their needs;
• Help the unbanked become traditional bank customers;
• Prove more profitable for banks making them more willing to implement it.