Barclays’ ‘Banking on Change’ disrupts savings model – and encourages others to follow suit
JOHANNESBURG, South Africa, 30 October 2015,- This World Savings Day Barclays and leading charities CARE International and Plan UK celebrate providing access to informal financial services to nearly 300,000 young people across Africa. The bank now calls on other financial institutions to follow suit and implement innovative savings models, enhanced by the latest technologies.
There are currently nearly 2 billion financially excluded adults around the world. Despite the introduction of mobile money and clever smartphone applications, 38 percent of all adults have no access to formal financial products. Working in partnership on a programme called Banking on Change with NGO’s CARE International and Plan UK, Barclays has set out to change this.
With a focus on supporting young people, the Banking on Change programme works in seven countries to give those in some of the world’s poorest communities the skills to save, as well as access to basic financial services.
The principle is simple; no-one is too poor to save. By forming community savings groups, individual members, most of whom earn less than US$2 day, save and lend together. Over 11,000 savings groups designed to meet the specific needs of young people have been created by the programme. They are provided with training to develop the skills and knowledge to save, manage their finances, and in most cases to set up a small business.
Barclays has developed bespoke products to suit the needs of a growing customer base in Africa, including group bank accounts, mobile banking products, and an overdraft facility.
The partnership has worked closely with the Grameen Foundation and Airtel in Uganda to develop innovative new mobile products. These products surmount some of the challenges preventing savings groups and others access from accessing financial services, such as distance to local bank branches and a lack of access to customer data.
Stephen Van Coller, Chief Executive, Corporate and Investment Banking, at Barclays Africa, said “Delivering mobile financial solutions in Africa, we are able to bypass traditional modes of banking, as experienced across the rest of the world. Innovation in mobile means we can create solutions that are geared towards the needs of local communities, businesses and savers – meaning we can tap into a much broader customer base across the continent”.
Smartphone innovations are fostering financial inclusion among the poor and unbanked, increasing financial transparency, and reducing security risks for staff and clients. Less commonly talked about are the wider, positive ‘side’ effects that these applications have for women in particular.
In Uganda, where there is a vast gender gap in finance, evidence has shown that smartphone applications can yield surprising benefits for women, particularly young women. The Kyebakola Kyobona youth savings group is one of the groups using Ledger Link, which helps members build a credit history with the bank by enabling them to submit digital records of their savings and loan activities.
These technologies help the women, in particular, better manage their finances, empowering them to take the lead in determining household finances. There have also been improvements in overall financial literacy, increased confidence and even social status as a result of the training and support provided.
Using lessons learned from Banking on Change, Barclays, CARE International and Plan UK have established the Linking for Change Savings Charter to encourage other financial institutions’ involvement in this issue. The charter sets out international principles enabling other organisations to effectively link community groups to formal banking products and savings.
Banking on Change model demonstrates how grassroots saving and linkage to financial institutions can contribute towards closing the gap on the two billion unbanked people across the world. There are clear opportunities for banks and other formal financial institutions worldwide, with informal savers alone representing a pool of potential customers with the ability to save $116 billion each year
Distributed by African Media Agency on behalf of Barclays Africa.
For more information on Banking on Change and/or the Ugandan case study, contact:
About Banking on Change
Since 2009, Barclays, CARE International UK and Plan UK have been working together in partnership to tackle the issue of financial inclusion by taking a savings-led, rather than credit-led approach to microfinance. It combines the expertise of each partner to give people in seven countries the opportunity and skills to save and manage their money more effectively and access to the basic financial services they need.
Banking on Change programmes have supported 750,000 people worldwide. 3,637 groups (approx. 96,000 people have been linked to formal financial institutions in Ghana, Kenya, Tanzania, Uganda and Zambia), including over 1,901 savings groups (approx. 53,055 people) have been linked to Barclays.
In 2013, Barclays renewed its commitment to the partnership with an additional investment of £10m, enabling us to reach many more people in Egypt, Ghana, India, Kenya, Tanzania, Uganda and Zambia.
Banking on Change is the first partnership between a global bank and international NGOs to successfully link informal savings groups to the formal banking sector.
Barclays is an international financial services provider engaged in personal, corporate and investment banking, credit cards and wealth management with an extensive presence in Europe, the Americas, Africa and Asia. Barclays’ purpose is to help people achieve their ambitions – in the right way. With 325 years of history and expertise in banking, Barclays operates in over 50 countries and employs over 130,000 people. Barclays moves, lends, invests and protects money for customers and clients worldwide. For further information about Barclays, please visit our website www.barclays.com
About CARE International UK
CARE fights poverty and injustice in more than 80 countries to help the world’s people find routes out of poverty. CARE also delivers emergency aid to survivors of war and natural disasters, and helps people rebuild their lives in the aftermath.
About Plan UK
Plan is a global children’s charity. It works with children in the world’s poorest countries to help them build a better future. A future you would want for all children, your family and friends. For more than 78 years Plan has been taking action and standing up for every child’s right to fulfill their potential by:
- giving children a healthy start in life, including access to safe drinking water
- securing the education of girls and boys
- working with communities to prepare for and survive disasters
- inspiring children to take a lead in decisions that affect their lives
- enabling families to earn a living and plan for their children’s future.
Plan does what’s needed, where it’s needed most. They do what you would do. With your support children, families and entire communities have the power to move themselves from a life of poverty to a future with opportunity.
Source: African Media Agency (AMA)