Russia visits Brazil to enhance knowledge of agent banking
The challenge
In Russia, an estimated 60 million people - about 40% of the population – do not have access to sufficient financial services, largely due to inadequate financial structures in remote regions and a mismatch between service delivery technologies and the needs of specific groups. Branchless banking, including the use of non-bank retail agents, is therefore part of the Russian Government’s strategy to overcome these hurdles.
Initially, there was serious concern among Russian policymakers about the riskiness of the agent banking model; in order for it to succeed, they needed peer-to-peer knowledge exchange that would enable the creation of safe and effective regulations that were proportional to the risks.
The opportunity
A delegation of Russian financial policymakers traveled to Brazil to learn from their Brazilian colleagues’ experiences in regulation and supervision of the banking agents (correspondents), measures of state stimulation of microfinance, as well as general state policy implemented to increase access to financial services.
During the visit the delegation members had several meetings with top management of the Central Bank of Brazil, Brazilian Minister of Planning, Budget and Management and the Brazilian Development Bank (BNDES) to discuss the general economic and financial situation in Brazil as well as various aspects of financial regulation and supervision. The Russian delegation also learned about the practical experience of bank correspondents and credit cooperatives.
The impact
The knowledge exchange grant to Brazil enhanced the Russian delegation’s understanding of the implementation of the ‘correspondent banking’ as it could be applied in Russia, as well as other strategies for expanding financial inclusion.
Following the exchange visit, Russia successfully introduced a number of new regulations and changes to policy. The creation of the new regulations is not necessarily a direct result of the exchange visit, however, the insights gained during the visits served to “inspire” policymakers and perhaps sped up the process.
