Morocco nearly doubled access to banking services in four years by creating a banking subsidiary of its national postal system. The new institution, Al-Barid Bank (ABB), has reached millions of people by using the post office’s extensive rural infrastructure to provide loans, cash transfers, ATMs and other credit facilities. ABB has also introduced a mobile payments system, available to both clients and non-account holders, and smaller outlets with more flexible opening hours that offer cash transfers.
Results & Impact
Within four years of Al-Barid Bank's creation, the proportion of Moroccan adults with access to banking services increased from 34% to 62%. The bank is adding between 400,000 and 500,000 accounts per year.
Moroccan Government, Poste Maroc, Al-Barid Bank, Swiss Capacity Building Facility, SOFAC, MoneyGram International
Al-Barid Bank was created out of Morocco’s national postal service and takes advantage of Post Maroc's extensive rural network. Al-Barid Bank was developed over three years before becoming independent of the postal service. During this time, a training centre was established to train staff, financial services companies were enlisted to help set up new services and large investments were made to ensure the bank’s infrastructure would be sufficiently secure and effective. Al-Barid Bank was launched in 2010 as a wholly owned subsidiary of Post Maroc, inheriting the post office’s 4 million current savings accounts.
Rural population, low-income people
Cost & Value
Al-Barid Bank cost $47.5 million to capitalize when it was launched in 2010. It also received a $16.5 million investment from Poste Maroc.
Running since 2010
Brazil has achieved similar results through a partnership between its national postal service and the country’s biggest bank.
Morocco nearly doubled access to banking services in four years by creating a banking subsidiary of its national postal system. The new institution, Al-Barid Bank (ABB), has reached millions of people by using the post office’s extensive rural infrastructure to provide loans, cash transfers, ATMs and other credit facilities.
Using postal networks to expand banking access has significant potential in the Middle East because of the relatively high proportion of rural communities that have access to post offices. Basic post office accounts, which provide limited deposit and saving services, are also fairly well-established in rural areas. Global Findex data has shown these account holders tend to be older, with less income and limited education and employment backgrounds.
ABB has a far higher percentage of its outlets in rural areas than any other national bank (more than 66%), due to the pre-existing network established by Poste Maroc. Most branches are shared between post office and bank, although increasingly ABB is opening its own.
ABB was set up with a mandate to foster social inclusion and is entirely owned by the Moroccan postal service. It was launched in the summer of 2010, inheriting four million customers from Poste Maroc, and obtained its full banking license at the end of the year. ABB’s creation required a three-year development process during which time the necessary infrastructure, personnel and systems were developed, prior to the split from Poste Maroc. Quality personnel were acquired through the establishment of a training institute, University Barid Al Maghrib, to ensure staff had the relevant skills, and by bringing in experienced professionals from the financial sector. Millions of dollars were invested to improve software systems, ensuring they were sufficiently secure, while initial capitalisation costs were $47.5 million.
The response to ABB has been so positive that the bank has consistently exceeded its targets. ABB achieved its goal of reaching six million account holders two years early, at the start of 2013. It is expanding at a rate of between 400,000 and 500,000 new accounts per year and has the second largest number of branches of any Moroccan bank, behind only Attijariwafa Bank. It is largely due to ABB’s growth that Morocco’s financial inclusion rate jumped from 34% in 2010 to 62% in 2014. In 2012, half of ABB’s clients earned under $100 a month.
ABB tailored its product offerings to its target client base by focusing on remittances. It partnered with EuroGiro, giving it cheap access to overseas transfers, and developed its own payment systems. This enabled ABB to obtain 80% of the remittance market.
While post offices already provided basic savings and current accounts, the creation of ABB gave rural residents access to a broad range of financial services. ABB partnered with a leading financial institution in Morocco, SOFAC, to help set up credit facilities. This ensured the loan system created was effective and has enabled many Moroccans to obtain credit services for the first time. ABB has also made account transfers possible and introduced ATMs to rural areas.
ABB also functions as a tool for dispersing welfare payments. The bank has an agreement with government agencies for benefits, pensions, scholarships and other social payments to be conducted through it on an exclusive basis.
New services were developed following its initial success. In 2013, a mobile payment system was established and made available to all residents regardless of whether they had accounts with ABB or elsewhere. To further improve accessibility, a network of outlets designed to offer greater operating flexibility was launched in 2014, under the name “Barid cash.” Although these only conduct cash transfers, it is hoped that their extended opening hours and lower operating requirements will further increase the number of people able to physically access banking services. The scheme has been successfully franchised and over 100 are in operation across Morocco.
(Picture: Flickr / Michael Button – no changes made)