Savings Banks and the Double Bottom-line: A Profitable and Accessible Model of Finance
2006, Peachey, S.
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A study commissioned by World Savings Banks Institute for the World Bank and Brookings Institute’s global conference "Access to Finance: Building Inclusive Financial Systems", Washington, D.C., May 2006.

This paper explains savings banks inbuilt commitment to providing access to finance and shows how they demonstrably deliver this.

The key findings of the study are:

• Savings banks have a built-in commitment to providing access:
  
  • For publicly or mutually-owned savings banks this will typically be built into their statutes;
    
  • for socially committed private retail banks it will be in their mission statement .
    
• Savings banks score relatively well on World Bank's identified dimensions of access:
  
  • Their simple, affordable products are useable for even low value and irregular financial needs;
    
  • Their branch network and staffing make them open to all levels of society and households;
    
  • Current regulation can give them the benefits of formality without compromising accessibility;
    
  • Many savings banks have products to satisfy the full spectrum of customers functional needs.
    
• Savings banks demonstrably deliver on their commitment to provide access:
  
  • They are the biggest single suppliers of accounts among double bottom-line institutions;
    
  • In the poorest fifth of countries where they operate they probably supply a quarter of all access;
    
  • In the richest countries they supply a similar proportion on average and more in some cases;
    
  • There are a few broad-outreach savings and payments-only savings banks that fulfill this role;
    
  • It is more common for access to be enhanced by savings banks with some credit capacity;
    
  • The strongest impetus often comes from savings banks with a specific microcredit capacity;
    
  • Microfinance alone is no substitute for a strong savings bank in moving towards full access.
    
• Savings banks can broaden their outreach without compromising profitability:
  
  • Most savings banks make a profit;
    
  • Their profitability is in no way systematically undermined by a broad outreach;
    
  • Cost effectiveness plays an important part in sustaining profitability and broadening outreach;
    
  • This links with keeping products simple and useable so they can run profitably on low volumes.

The paper finally concludes that Savings banks can justifiably be called double bottom-line institutions balancing as they do the twin objectives of providing access for all and still making a necessary profit.

19 Mar 2009

United States

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Publisher(s):
World Savings Banks Institute
European Savings Bank Group (ESBG)

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