With 80 percent of the Malagasy population living in non-urban/remote areas of the island and existing bad infrastructure conditions in Madagascar the existing branch network is not enough to provide for convenient banking both for the existing and potential client base. Therefore the access to financial services for the majority of the Malagasy population still remains a challenge. The high investment costs for opening a traditional branch in areas remote from urban infrastructure and the limited business such a branch could attract present a challenge for financial sustainability. A Mobile/Branchless Banking Solution is perceived as a sustainable and secure channel for access to financial services. It could enable the Bank (i) to extend its outreach by providing banking services to the unbanked population of areas so far not covered by traditional banking, and (ii) to add new service delivery channels for the existing client base and underbanked clients in areas already covered by traditional banking.
The prefeasibility study carried out in March 2011 three branchless banking options were assessed: (i) co-operation with a mobile network operator, (ii) deployment of automatic teller machines (ATMs), (iii) deploying a network of point of sale (POS) terminals in co-operation with one or several retail companies.
The feasibility study reassessed the three options and partnering with local mobile network providers was recognized as the preferred option and initially aiming to provide additional channel to its existing client base. Pilot phase is ongoing.