Banks worldwide have proven themselves woefully inept at providing poor people a means to help them prosper financially. Either banks take advantage of them or have no clue how to market services to them or figure they are not worth the effort since they are, indeed, poor. So there exists a gaping need amongst the world's poor for financial tools to help lift them out of poverty.
That's where alternative financial services (AFS) come in. These are processors and program managers that offer microfinance loans for people to start businesses and hire workers; payment cards that are not tied to bank accounts; mobile phone services such as bill pay and money transfers to electronically direct money where consumers want it to go.
Take, for instance, India. This country of over 1 billion people has an inordinate amount of desperately impoverished people. Lately, the Reserve Bank of India (RBI), which manages the country's monetary policy, granted licenses to alternative financial services companies to expand their networks amongst the nation's poor. Using the services mentioned above, these companies are busy reaching out to the "unbanked", expanding prepaid card reload networks, and striking partnerships with telecoms for mobile payment capabilities.
It is ironic that RBI is controlling this initiative, since the bank was unable or unwilling to help its own poor directly. But maybe it has seen the light philosophically, or perhaps to be more realistic, it recognizes the profits available through its AFS intermediaries. I'm sure those bank licenses don't come cheap.
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