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Post Offices Fill Financial Inclusion Gaps

Reaching the financially excluded section of people around the world has become even tougher, especially after the Covid-19 pandemic. Within the financially excluded areas, people do require financial assistance from various services however opening a brand new branch can be a little expensive. It will take a lot of investment to open up different kinds of banking services as well as to make it open for a long time; it will have to do a lot of business. This is one of the main reasons why a lot of financial services cannot be properly provided to remote areas where there are no financial resources.

Now, in terms of solutions, mobile money technology can be the way through which proper financial services can be provided to these remote groups of the population all over the world. However, there are other ways to do it as well. As a lot of developing countries like Africa are focusing on different sorts of agent banking and post office solutions to reach out to these financially secluded people.

Opening up or maintaining a new banking service can take up a lot of financial sources which is not available in these mid-income countries. So post offices have suddenly become vital services within rural areas as these are essential for any financial inclusion operations.  

Even though the overall role or contribution of post office services has been slowly decreasing as it is clear from the fact that letter post has declined more than 3% per year. However, within rural and underdeveloped areas, post office services are proven to be essential to increase financial inclusion operations amongst the remote population. Before we move ahead with the actual practicality of its operations in countries like Nigeria, let’s have a look at the roles of these post offices and how they can fulfill financial inclusion.  

What is the Role of Post Offices in Financial Inclusion?

What Is the Role of Post Offices in Financial Inclusion?

Financial inclusion has suddenly become a topic of interest within international policies. In terms of postal sectors, a lot of the worldwide population is using it for their savings accounts, especially in rural areas. It is a proven fact that postal sectors can play a vital role in progressing the state of financial inclusion. In the case of Brazil, the country had initiated more than ten million savings accounts after Banco Postal Service established a partnership with other financial services in the country. 

  • Post Offices are the only essential information and service that is available in financially excluded areas. As for all the people who are looking to make any bill payments in these remote areas they will have to depend entirely on these postal services within the areas. It is the only source for these people to make payments for their day-to-day activities. 
  • Post offices can also play a big role in engaging more people in economic activities. As most of these population lives the below poverty line they will need the help of postal services to get engaged in the more economic process. 
  • In most underdeveloped countries, job security is also one of the major issues that the population has to face constantly. With the help of the postal sectors, more jobs can be created for these people as this can give them more financial stability within society. By establishing a new sector like the postal services a whole new lot of job opportunities can be initiated in all these rural areas.    
  • These postal services can also open up the gate to the financial transfer process for all the rural population. As can be seen in the context of Kyrgyzstan where a lot of migrant workers can transfer the funds to their home relatives. 
  • In the context of some other underdeveloped countries like Brazil, they have transformed postal services from savings banks to postal banks. In this case, the postal services will have to partner with other financial institutions to offer other services. Like seen in the case of Ghana where its postal services can offer its citizens cash-in and cash-out services as well as the repayment of loans.  

All of these factors clearly bring out a lot of possibilities that can be achieved by underdeveloped countries as postal services do play a big role in increasing financial inclusion. With the availability of different sorts of financial services through postal services, a lot of these underdeveloped populations can acquire financial inclusion within their country as seen in the case of financial inclusion of refugees in Al Majmoua in Lebanon.   

Challenges to Provide Financial Services in Rural Areas

There is a clear reason why financial inclusion is a hot topic nowadays as most of the rural underdeveloped areas do struggle with the lack of financial accessibility. Why these issues are still prevalent in today’s day and age where digital disruption has already knocked down a lot of doors? One of the main challenges of providing financial inclusiveness to these rural areas of the world is due to agricultural operations and their dependency on natural resources. So providing financial assistance in these sectors can be risky. 

The other challenge, in this case, is also the mindset of the financers as they think most of these investments will only be done in agricultural activities. This is not true at all as a lot of the population also needs non-financial services as well. This is where the basic micro-credit services and emergency expenses need to be met by the financial services as well. 

The other challenge of providing financial inclusiveness that all the financial institutions face is that they think that most of these rural people are not bankable at all. Again this is not true at all as a lot of rural people are already adopting the latest technologies and they are not illiterate at all. So it can be safe to say that these financial institutions need to change their viewpoint about the rural population as there are also some sections of people who are not into farming.  

Without properly examining these issues financial institutions can not initiate financial inclusion operations in remote or rural parts of the world. As microinsurance can be the Cinderella of financial inclusion to join the global ball. In this case, the sources that can be required for financial inclusion can also be really expensive like opening up new branches of banking services in these rural areas. However, there are some other alternatives as well as postal services can also be used to provide financial inclusion in rural underdeveloped areas. You may be asking if can it be used. Well in that case let’s have a look at the possibilities of this thought.       

Can Post Offices be Used in Providing Financial Services to Remote Areas?

It is a proven fact that more countries are using postal services to provide financial inclusion in different kinds of rural areas. In this context, these postal services are making partnerships with other financial institutions so that postal savings can be turned into postal banks for financial transactions. It is a kind of agent banking service that is being used currently all over the world. 

Postal Banking Services

Through this process, a lot of the other kinds of convenience stores, retailers, and supermarkets can be transformed into banking accounts. This can be extremely helpful in the context of all the underdeveloped countries as this means they will not need to open up a lot of banking branches for financial inclusion. The postal services can do the job of postal banking services for their day-to-day activities. 

Expansion of Mobile Money Services 

With the help of postal services, these developing countries can also increase the number of users of mobile money services. It is clearly evidenced in the case of Madagascar as the country is currently increasing its mobile money services to more than 170 post offices from all over the country. This service was recently announced by the second biggest phone provider Airtel as this will definitely help the common people as only 5% of them has formal banking accounts. So postal services can also be used in helping the increased rate of mobile money users in any country. 

Post Offices Can Provide More Security 

In the case of rural areas post, offices tend to be more secure and safer than banking branches. It is clearly seen in the case of Borneo as the country has made its first step toward a financially inclusive society by providing power to its various post offices. 

In this case, the country has chosen post offices over the banking branches due to their cost-effectiveness and security reasons. As more than 87% of the country’s population lives in remote areas it is a welcome move for all these residents. This also proves the fact that postal services can be a good solution for any country’s financial inclusion operations. 

With the above discussion, it can be said that postal services have a huge role to play in any country’s financial inclusion operations. As most of these rural residents do not have the option of enough banking services in remote areas these postal services can transform any retail shop into postal banks. In this way, these people can get into more digital transactions as this can turn them into more economical activities.

The safety and security of these postal services are also another reason why these should be initiated rather than any new banking services in these remote areas. So now that it is clear that postal services can increase financial inclusion now let’s have a look at how these services are helping in countries like Madagascar, Borneo, Nigeria, and so on.   

How Post Offices are Helping in Providing Financial Assistance To Secluded People?

In the case of increasing financial inclusion a lot of developing nations are turning toward postal services to provide on-spot financial services to all the remote sections of their populations. In this regard, these postal services are cooperating with different types of other financial institutions to initiate the digital transaction process for all the common people. 

This as a result has initiated the use of postal banking as this is a sort of agent banking process through which any kind of supermarket or retail store can be turned into banking services. Here are some of the examples of different countries which has successfully adopted this service for the benefit of more financial inclusion. 


In the context of Madagascar, the country is using the second biggest mobile phone provider Airtel to increase mobile money service usage as it is being expanded to more than 170+ postal offices. This has definitely helped the common population of the country as they had limitations in terms of their payments and withdrawals as it was only possible through certain Bank of Africa locations. 

As only 5% of the general population has access to banking accounts this kind of adoption of mobile money technology within the postal services has really helped in the cause of this common public within the country. 


Borneo as a country has also initiated a plan to boost the power of its postal services as the country is seeing it as a first step toward a financially inclusive society. The country is using postal services due to their safety and security protocols as it will be better than any new banking branches. The cost-effectiveness is also another reason why the country is choosing these postal services rather than banking branches.

As more than 87% of the population in Borneo lives in remote areas this can create a lot of opportunities to increase the financial inclusion program. Most of the common people in the country do not have any kind of access to formal banking services this procedure can definitely help them to use different postal services as banking counterparts. 


Nigeria as a country is currently focusing on initiating agent banking services to all of its citizens. According to the surveys it was found that the average distance between a banking service from a local Nigerian was more than 10 kilometers. This clearly paints a  horrible picture as more than half of the population in the country does not have any access to any financial services. 

This is where agent banking services can definitely help various financial institutions to regain the trust of the common Nigerian population and help women control their financial lives through digital financial services. The current strategy of the country is to provide financial inclusion operations to more than 80% of the entire population. 


In the context of Kyrgyzstan, the country is using a different strategy for financial inclusion as different kinds of NRD companies have come together for the launch of KASU POST. It is a sort of non-postal service which can offer financial services to the common population of the country. By launching this service the country has enabled a new transfer service named ProTransfer.

Through this ProTransfer service, all the migrant workers can easily send money to their relatives. This can also be a great solution for the digital transfer of funds as is evidenced in the case of Kyrgyzstan. There are already more than 400 postal services in the country that offer this service to all the people who have no access to any kind of financial services. 


Postal services are also being used for sending remittances as is evidenced in the rural parts of Africa like Ghana. The overall sending cost of remittances was one of the major challenges for all the migrant workers in Ghana. With the help of digitalization and the connection between post offices, this cost was decreased by more than 42%. 

Apart from this digitalization process also created a lot of opportunities for Ghana to launch newer financial services. All of these can be a good indication of the overall increase in inclusive financial operations and financial literacy for professional athletes within these parts of remote Africa. 

All of these success stories within these parts of the world required different solutions. As postal services do need certain digital makeovers to fully transform to give banking services to all the people. 

Areas of Improvement for Full Transformation of Postal Services 

Postal services have been used in certain developing countries for financial inclusion operations as it is initiated a lot of positive affect on the entire economical standards for quite some time. However, it should also be known that to achieve this all the postal offices should be digitally transformed. Now in this case there are certain areas that should be focused on to properly transform these services for financial inclusion operations. 

Finding Newer Financial Services

One of the most important areas of post offices that need to be transformed is the availability of more financial services as through this process it can be used as another payment service provider as well. A lot of the postal services in Africa have initiated the option of using remittance services for migrant workers. There can also be bill payment options that can be added to these postal services for the benefit of rural citizens. 

Turing the Post Office Operations Into a Public Service

The other area that needs to be focused more on is the transformation of the post offices into public hubs. In this way, the postal services can deliver public services like the declaration of any citizen’s residence. 

Collaborating With Various Logistics Providers 

All postal services are now becoming a crucial part of any e-commerce provider as these platforms are constantly growing day by day. So the collaboration process with various logistics providers can also be another critical area of the postal services that need to be taken care of.   

Training the Postal Staff 

For the digital makeover of the postal services, the workers need to implement new technical systems for other transaction services. So it will require retraining of the entire staff members to properly go about all the operations. 

Risks Associated With Post Office Banking Schemes

While adopting postal banking services can definitely help increase financial inclusion operations there are certain risks that are also associated with it. Some of these are:

  • As most of the agent banking services or postal banking schemes are conducting transactions without the help of the formal banks it will require third party transactions. This can be really risky in certain conditions. 
  • The client protection in these services can be really low sometimes. 
  • The overall quality of the treatment can also vary in certain cases.
  • As most of the postal banking services can be done with the help of third-party providers consumer data privacy can come into question.    

Frequently Asked Questions (FAQs)

Q1. What is the role of the post office in financial inclusion?

Post Offices can definitely play a big role in increasing financial inclusion in certain developing countries like Ghana and Madagascar. Postal services in these countries can partner with other financial institutions to create postal banking services and increase the transaction rate as it can be called all innovations in financial capability. In other countries, postal services can also increase the usage of mobile money services as this also can help in increasing the overall financial inclusion rate of any country. 

Q2. What is the importance of the post office in business?

Postal services have become essential for various e-commerce platforms as they can be used to collaborate more with other logistics providers for business. It also helps in increasing digital transactions as this can also be helpful for increasing any business-related operations in the current age. 

Q3. How successful post offices have been in promoting financial inclusion? 

Post offices have played a significant role in promoting financial inclusion, particularly in developing countries with limited access to formal banking services. They offer a range of financial services, including savings accounts, remittances, and insurance, which can be accessed by low-income individuals, migrants, and rural communities. Post offices have also partnered with banks and mobile money providers to expand their reach and offer more sophisticated financial products. 

However, the success of post offices in promoting financial inclusion varies widely across countries, depending on factors such as government support, infrastructure, and regulation. Despite these challenges, post offices continue to be an essential player in promoting financial inclusion, particularly in areas where traditional banks are not present.

Overall View

Financial inclusion has become extremely crucial for any developing nation as more countries have started using their postal services to provide spot financial services to all of their citizens. All postal services are collaborating with other financial institutions to increase financial digital transactions as this is one of the key ways to build more financial inclusion among the population. Thus by transforming the postal services different developing nations like Africa and Madagascar are already seeing a lot of benefits. The overall role of postal services thus can be critical for the success of all developing nations.

Author Profile

Jonas Taylor
Jonas Taylor
Jonas Taylor is a financial expert and experienced writer with a focus on finance news, accounting software, and related topics. He has a talent for explaining complex financial concepts in an accessible way and has published high-quality content in various publications. He is dedicated to delivering valuable information to readers, staying up-to-date with financial news and trends, and sharing his expertise with others.

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