Financial Inclusion and the Role of the Post Office
Given their widespread presence in rural and poor areas, post offices can play a leading role in advancing financial inclusion. Yet little is known about the type of clients that post offices reach through their financial service offerings as compa...
| Main Authors: | , , , |
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2014
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2013/10/18419181/financial-inclusion-role-post-office http://hdl.handle.net/10986/16882 |
| Summary: | Given their widespread presence in rural
and poor areas, post offices can play a leading role in
advancing financial inclusion. Yet little is known about the
type of clients that post offices reach through their
financial service offerings as compared with clients of
traditional financial institutions (such as commercial
banks). This paper documents and analyzes account ownership
patterns at post offices in comparison with traditional
financial institutions, using the Global Financial Inclusion
Indicators (Global Findex) database, which collects data on
account ownership at post offices in 60 countries where
postal accounts are offered. Controlling for a host of
individual characteristics and country fixed effects, the
paper finds that post offices are relatively more likely
than traditional financial institutions to provide accounts
to individuals who are most likely to be from financially
vulnerable groups, such as the poor, less educated, and
those out of the labor force. The paper also uses data from
the Universal Postal Union to explore the degree to which
different postal business models and the size of the postal
network help explain differences in account ownership
patterns. The results suggest that post offices can boost
account ownership by acting as cash-merchants for
transactional financial services, such as electronic
government and remittance payments, and that partnerships
between the post office and other financial institutions
coincide with a higher bank account penetration. The paper
also finds that the size of the postal network matters; the
larger the network-relative to the network of traditional
financial institutions -- the more likely it is that adults
have an account at the post office. |
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