UN Seeks Enhanced Financial Services across Postal Sector

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A new study released by the United Nations global post agency, the UN Universal Postal Union (UPU) has recommended that the global postal sector should increase its financial services.

This is in an effort to reach millions of unbanked people, help grow small and medium-sized businesses and reduce poverty overall; a process that would work well in Nigeria.
In a release presenting the report, Global Panorama on Postal Financial Inclusion: Business Models and Key Issues, the UPU described financial services as “a key lever in advancing the inclusion of unbanked populations into the formal financial system,” noting that already one billion people worldwide were benefiting from financial inclusion via their local postal services.

“The postal network offers tremendous potential for fostering financial inclusion,” one of the authors of the UPU report, Alexandre Berthaud, said in the release.

The report’s release comes as more than 2,000 delegates are gathered in Doha, Qatar, for the 25th Universal Postal Congress to examine the challenges that have arisen for the global postal sector and how to strengthen its services worldwide.

The three-week meeting brings together postal leaders and stakeholders from the UPU’s 192 member countries to decide on the global postal sector’s future, including proposals to modify the rules and regulations governing the exchange of international mail, as well as recommendations on the way forward in areas such as quality of service, postal security, e-commerce and trade facilitation, and postal financial services.

Emphasising the role financial services can play in advancing the anti-poverty targets known as the Millennium Development Goals (MDGs), Berthaud acknowledged that although one billion people worldwide already avail themselves of postal banking services – adding up to some $1.6 billion in savings and deposit accounts – more intensive efforts were necessary to increase the number of account holders.

In addition, the UPU Congress adopted a resolution last week urging member countries to continue developing financial services and recognising the importance of such services in reducing global poverty. Moreover, during the most recent financial crisis, numerous postal services offering financial services saw an increase in the number of customers and accounts.

The report also detailed five categories of business models available to postal services seeking to adopt financial services, ranging from cash merchant for government and financial services providers to having fully licenses postal financial services, such as their own postal bank.

“If only 51 Posts (postal services) offering saving accounts can bank a billion people, then the remaining postal operators of the UPU’s 192 member countries, especially strongly populated ones such as Nigeria, Russia, Mexico, Ethiopia, and Colombia, could easily provide a gateway to financially include at least 500 million unbanked people directly or through partnerships with banks,” Berthaud added.

The Berne-based UPU was created in 1874. In addition to maintaining a universal network that provides modern products and services, the agency establishes the rules for international mail exchanges among its 192 members and makes recommendations to stimulate mail volume growth and to improve the quality of service for customers.