Quantitative Study on the Impact of Branchless Banking on Microfinance Institutions

In this study, we examined how implementing branchless banking partnerships (BBPs) can enable microfinance institutions to improve their efficiency by reducing cash handling and to expand its product offering to savings. We examined the case of Attawfiq Microfinance in Morocco, that implemented a BBP strategy named Low Income Banking (LIB) in order to achieve increased efficiency and expand its product offering to savings through the LIB account offering. We studied how the customers of Attawfiq used the LIB account for transactional and savings purposes by analysing a large database of sociodemographic factors of customers and payments data of microcredits for the period 2010–15 (554,541 customers). We included in our analysis, for the first time to our knowledge, not only the study of the correlations between a very extensive dataset of sociodemographic variables and the use of bank accounts in terms of transactions and savings, but also the study of microcredit data as explanatory variables. Our study concluded that the BBP model implemented (LIB) allowed Attawfiq Microfinance to improve its operating efficiency although it failed to achieve increased savings.