The Role of Postal Networks in Expanding Access to Financial Services: Volume II

This paper discusses the landscape of postal networks in the African region, and the role of postal networks in providing access to financial services and their potential role in the expansion of access. The paper states that:

• Post offices in African countries have provided a payment source and savings services for more than hundred years.
• There is a wide-spread consensus that:
  • Post offices could play a more active role in providing access to financial services;
  • Postal financial services need to be revamped from fragmented single products to integrated packages that include payment cards, savings, deposits, insurance and even credit.

Recognizing the decline of the postal network in most African countries, the paper identifies the following inhibitors of post office success:

• Government reluctance to give up control;
• Lack of quality control and high expenses.

It concludes that:

• Revenues from postal operations cannot sustain rural postal networks in Africa;
• There is a need for reform, leading to strong and competent institutions;
• The postal services need to be repositioned as the front-end of the financial sector and modern information services.

The paper recommends the assessment of the following options to develop the postal sector as a vehicle for financial services provision:

• Alliances with privately managed financial institutions;
• Cross-border cooperation;
• Private postal agents;
• A process that is not dependent on the pace of postal reform.