Kigali, Rwanda — Despite a growing number of financial institutions, the number of people without financial services remains high.
A recent research paper by the World Bank indicates that 2.5billion people in the world remain unbanked.
In the research paper released two weeks ago by the World Bank, many of the unbanked population which includes 75 percent of the world's poor and those living in rural areas are mostly kept away from formal financial services by Cost, Documentation, and Travel Requirements involved in loan processing.
In a bid to overturn this trend, Policy makers are being urged to boost the number of people using formal financial services through policies that help reduce the cost, documentation requirements, and travel distance associated with accessing a bank account.
A case in point for Rwanda where current financial penetration is just 21% percent of the entire population leaving almost 80% unbanked but the target is to overturn the statistics to have over 70% accessing financial services by 2020.
And banks have also started going for this unbanked population using tailor cut banking methods that bring the financial services closer to the people.
Almost all major banks in Rwanda have now adopted the 'agency banking' model where agents are dispatched to remote areas to provide services such as accepting deposits, withdraws and many other s.
KCB Rwanda, a subsidiary of the Kenya Commercial Bank (KCB) Group was one of the first banks to introduce agency banking in Rwanda and helped the regional bank to amass its current customer base estimated to be close to 100, 000 at the end of 2012.
According to KCB Rwanda's Managing Director Maurice Toroitich the bank has recruited 3296 agents countrywide with average monthly transactions of 40,000 deposits and 8,000 withdrawals.
"It takes minimal cost to access the service and it is far less than the costs customers currently spend visiting branches to access banking services," notes Toroitich.
Market leaders Bank of Kigali also have the agency banking service which they recently backed up with mobile banking vans posted in each of the country's five provinces.
The mobile bank vans ensure that bank agents deep in the villages don't run out of liquid money or get hardships in keeping customer deposits as it re-liquidates as well as receiving deposits from agents.
The policy study followed publication in April this year of country-level data which revealed that three-quarters of the world's poor didn't have a bank account, among other findings.