I suppose in Kenya Mpesa agents and local shops are our best bets on branchless banking and I agree with Graham’s thinking. In rural Kenya, almost every village has an Mpesa agent as a money centre. I still don’t see the reason why Mpesa agents shouldn’t be empowered as the last frontier of financial inclusion. An Mpesa agent is independent as far as working capital is concerned and the business premises they are located can run other financial services(just like they sell airtime, Mpesa, telephone lines and all other Safaricom products.). With M-swari now, saving and credit services are available and open to all Safaricom customers. Outstanding is Insurance, investment, pension and I can see Safaricom partnering in the near future with an Insurance company, pension provider and a dynamic investment advisor. With such a functionally loaded Safaricom agent, why would any villager need a bank?

Graham, correct me if I am wrong, that the ubiquity of cash availability systems has reduced insecurity fears. I remember when ATMs appeared, people used to fear using them lest criminals will be lurking about to rob them. That fear has gone and queues are common at ATMs. Same with Mpesa. Robberies were more common initially but as more Mpesa agents mushroomed, fear faded. Even in the most hostile neighborhoods, it is common to see several Mpesa agents going on with their money business without fear of robbery( it happens less often than expected in such open cash handling setups). I guess each agent devises own security mechanism. Therefore, a villager will not walks many miles to access a Post Office Bank just because they want to have their money secure in a brick and mortar edifice. A phone is good enough these days, in fact gives a better security feeling since even if the phone is stolen, money is secure. Indeed, security is a mind stuff.

Given a choice, those currently without bank accounts, or with inconvenient dormant accounts, might open and more actively use postal accounts if the post office were close by and able to offer full banking services. These services would have to include credit, unavailable for example in India, and more timely cash management in any region that depends on internal or external remittances, plus of course guaranteed deposits.

The post office may inspire more trust than most mobile operators, technology providers, or vendor of soft drinks and snacks, but the safekeeping of money requires a level of security and confidence that most depositors only accord to banks.

For more see : http://microsave.org/sites/files/technicalBriefs/briefingNotes/BN_98_Should_We_Bank_on_Phones_or_the_Post.pdf