APPROXIMATELY 1.7 BILLION adults—25
percent of the world’s population—lack
access to basic financial services, according
to Global Findex, a report on the
world’s banking habits. In a recent paper,
two professors at ESPAE Graduate
School of Management in Guayaquil,
Ecuador, explore the transformative
impact of financial services (FS) on
happiness and well-being among unbanked
populations.
According to co-authors Juan Carlos
Bustamante and Adriana Amaya, two
primary obstacles prevent the unbanked
from using FS: a distrust in financial
systems and a lack of knowledge about
how these systems work. With this in
mind, the co-authors argue, FS providers
could encourage more low-income
individuals to take advantage of their
services by taking three steps: opening
locations in close proximity to disadvantaged
neighborhoods, designing tailored
educational messages about using the
features of FS, and clearly communicating
the benefits of FS.
“It may be not enough for storekeepers
to simply express positive messages,”
write Bustamante and Amaya. “It is also
important to be attentive to the way
customers process the messages.”
To learn more about the real-world
impact of such strategies, the co-authors
surveyed customers of Neighbor Bank
(NB), whose locations serve residents
living in rural or isolated areas of Ecuador where traditional financial services
are often not offered. NB was created to
introduce residents of these areas to formal
banking services on behalf of Banco
Guayaquil, a large FS firm. NB storefronts
are run by “small entrepreneurs
who act as storekeepers and ‘neighbor
bankers’” who assist customers, answer
questions, and respond to any misgivings
customers might have about using
the services, the co-authors explain.
Of 312 respondents to the survey,
more than 64 percent earned incomes of
US$200 to $350 per month, which falls
below Ecuador’s nearly $400 monthly
minimum wage. All respondents were
asked to rate the extent to which they
agreed or disagreed with statements
in three categories: customer support
(“The shopkeeper is respectful toward
me”), customer participation (“I have
more control over my personal finances”),
and customer well-being (“Using
NB makes me happy”).
The researchers found that customers
were largely satisfied with the
support they received from NB storekeepers,
and as a result, reported an increased
trust in and use of the services.
Overall, customers also reported feeling
more in control of their finances and experiencing
a greater sense of well-being.
If governments want to lower
poverty rates and improve quality of
life for low-income populations, argue
Bustamante and Amaya, they should
create services tailored to the needs of
unbanked individuals and collaborate
with service providers to create homegrown
approaches designed to build
trust in FS. By increasing customer
participation in FS, the co-authors
write, policymakers “could foster
financial inclusion and well-being
in vulnerable population users in
developing countries.”
“A Transformative Perspective of
Financial Services for the Unbanked”
was published online ahead of print
December 20, 2019, in the Journal of
Services Marketing.