Postal Financial Inclusion: Delivering the Missing Billion Accounts Luxembourg, 25 November 2009 Postal Financial Inclusion: Delivering the Missing Billion Accounts Luxembourg, 25 November 2009

Low-income people visit post offices: more than a billion among the poor Already many financial transactions Not accounted for in IMF and World Bank financial statistics: 70 % of people excluded from formal finance 20 or 30 % likely to be using posts

Financial crisis: a need for trusted financial intermediation Trust as a key asset of Posts Financial crisis: danger of heavy dependence on foreign capital flows Posts as a key savings collection infrastructure to enhance macroeconomic stability

UPU-AFI Workshop on Financial Inclusion and Postal Banking (9 and 10 November) 15 developing and emerging countries benefiting from information exchanges grants to share best practices and analyses Inclusion and economic efficiency in the provision of financial services are compatible (« magic of the post »)

Evaluating « finance for all » policies and measuring its impact A quasi-natural experiment: the « Banco Postal » case in Brazil Taking advantage of the gradual opening of « Banco Postal » branches throughout the country

More than 40 % of municipalities without banks in 2002 => increasing transactions costs for the poor

: 2,450 BP agencies, 822 agencies where no bank or other correspondent 2003: 3,813 BP agencies, 1,108 agencies where no bank or other correspondent 2004: 5,362 BP agencies, 1,299 agencies where no bank or other correspondent 2005: 5,444 BP agencies, 1,154 agencies where no bank or other correspondent 2006: 5,567 BP agencies, 856 agencies where no bank or other correspondent

Semi-deciles of population Least populatedMost populated

Semi-deciles of GDP per capita PoorestRichest

Mobilizing savings In the 50 % poorest municipalities Less than 30 % of the total population Half of the total savings accounts of Banco Postal Access to microfinance and loans In the 20 % poorest municipalities 10 % of the total population 25 % of all loans and micro-loans

Without BP within a municipality With BP within a municipality: average effect ◊ ◊ up to 163 new firms ◊ up to 1,209 new jobs ◊ up to 9 new banks for 100 municipalities ◊ ◊ up to 201 new firms (+ 23%) ◊ up to 1,381 new jobs (+ 14%) ◊ up to 14 new banks for 100 municipalities (+ 56%) ◊ Effects more likely if some degree of financial intermediation (1 to 5 banks before BP opening)