wsbi savings bank rural poor - delivering affordability in a sustainabile way
DESCRIPTION
.TRANSCRIPT
WSBI programmeto double savings accounts at members
World Bank Brown Bag Lunch
Washington DC, 17 Sep 2013
DELIVERINGAFFORDABILITY IN
A SUSTAINABILE WAYStephen Peachey
The challenge we were left with:Can we get ourselves down to the hyper‐elastic part of the demand curve?
Demand –v– Supply
The same issues reframed from a member perspective: How big a customer base might I get by going downmarket? How much will they use me and how much can they pay ? How will breakthrough change my economics of supply ?
…. And can we get the …. And can we get the supply curve slope to take us down through the elastic bits of the
demand curve?
How elastic is the demand curve at different key points along the curve? ….
Quantity
Price
< 50¢ 20%
0.0515%30%50%70%85%95%
Headcount ratioPPP‐$1.25 68%PPP‐$2.00 88%PPP‐$2.50 93%PPP‐$4.00 98%PPP‐$5.00 99%
0%
20%
40%
60%
80%
100%$0 $3 $6 $9 $12 $15
Cumulative share living o
n less th
an . . .
. . . the following US dollar amounts per capita per day
0%5%10%15%20%25%30%
under 7
5¢
$1.00‐$1.25
$1.50‐$1.75
$2.00‐$2.25
$2.50‐$2.75
$3.00‐$3.25
$3.50‐$3.75
$4.00‐$4.25
$4.50‐$4.75
over $5.00
Population split by actual $/day40%
Country Name Indicator Name 2007Tanzania Poverty headcount ratio at $1.25 a day (PPP) (% of population) 68%
Country Name Indicator Name 2000Tanzania Poverty headcount ratio at $1.25 a day (PPP) (% of population) 85%
Country Name Indicator Name 2007Tanzania Income share held by lowest 10% 3%
Country Name Indicator Name 2000Tanzania Income share held by lowest 10% 3%
Country Name Indicator Name 2011Tanzania Household expenditure per capita (current US$) 342
Country Name Indicator Name 2000Tanzania Household expenditure per capita (current US$) 234
Country Name Indicator Name 2011Tanzania GDP per capita, PPP (current international $) 1512
Country Name Indicator Name 2000Tanzania GDP per capita, PPP (current international $) 770
We can never observe the demand curve but we can use WB OpenData to get pointers
Pull data from WDI and the Poverty/Inequality databases Transform income inequality data into $ consumption / day Interpolate to get % population by spending band
Country Name Indicator Name 2000Tanzania GDP per capita, PPP (current international $) 770
Country Name Indicator Name 2011Tanzania GDP per capita, PPP (current international $) 1512
Country Name Indicator Name 2000Tanzania Household expenditure per capita (current US$) 234
Country Name Indicator Name 2011Tanzania Household expenditure per capita (current US$) 342
Country Name Indicator Name 2000Tanzania Income share held by lowest 10% 3%
Country Name Indicator Name 2007Tanzania Income share held by lowest 10% 3%
Country Name Indicator Name 2000Tanzania Poverty headcount ratio at $1.25 a day (PPP) (% of population) 85%
Country Name Indicator Name 2007Tanzania Poverty headcount ratio at $1.25 a day (PPP) (% of population) 68%
Country NameIndicator Name
2007
Tanzania
Poverty headcount ratio at $1.25 a day (PPP) (% of population)68%
Country NameIndicator Name
2000
Tanzania
Poverty headcount ratio at $1.25 a day (PPP) (% of population)85%
Country NameIndicator Name
2007
Tanzania
Income share held by lowest 10%
3%
Country NameIndicator Name
2000
Tanzania
Income share held by lowest 10%
3%
Country NameIndicator Name
2011
Tanzania
Household expenditure per capita (current US$)
342
Country NameIndicator Name
2000
Tanzania
Household expenditure per capita (current US$)
234
Country NameIndicator Name
2011
Tanzania
GDP per capita, PPP (current international $)
1512
Country NameIndicator Name
2000
Tanzania
GDP per capita, PPP (current international $)
770
Country NameIndicator Nam
e
2007
Tanzania
Poverty headcount ratio at $1.25 a day (PPP) (% of population)
68%
Country NameIndicator Nam
e
2000
Tanzania
Poverty headcount ratio at $1.25 a day (PPP) (% of population)
85%
Country NameIndicator Nam
e
2007
Tanzania
Income share held by low
est 10%
3%
Country NameIndicator Nam
e
2000
Tanzania
Income share held by low
est 10%
3%
Country NameIndicator Nam
e
2011
Tanzania
Household expenditure per capita (current US$)
342
Country NameIndicator Nam
e
2000
Tanzania
Household expenditure per capita (current US$)
234
Country NameIndicator Nam
e
2011
Tanzania
GDP per capita, PPP (current international $)
1512
Country NameIndicator Nam
e
2000
Tanzania
GDP per capita, PPP (current international $)
770
Country Name Indicator Name 2000Tanzania GDP per capita, PPP (current international $) 770
Country Name Indicator Name 2011Tanzania GDP per capita, PPP (current international $) 1512
Country Name Indicator Name 2000Tanzania Household expenditure per capita (current US$) 234
Country Name Indicator Name 2011Tanzania Household expenditure per capita (current US$) 342
Country Name Indicator Name 2000Tanzania Income share held by lowest 10% 3%
Country Name Indicator Name 2007Tanzania Income share held by lowest 10% 3%
Country Name Indicator Name 2000Tanzania Poverty headcount ratio at $1.25 a day (PPP) (% of population) 85%
Country Name Indicator Name 2007Tanzania Poverty headcount ratio at $1.25 a day (PPP) (% of population) 68%
Country Name Indicator Name 2000Tanzania GDP per capita, PPP (current international $) 770
Country Name Indicator Name 2011Tanzania GDP per capita, PPP (current international $) 1512
Country Name Indicator Name 2000Tanzania Household expenditure per capita (current US$) 234
Country Name Indicator Name 2011Tanzania Household expenditure per capita (current US$) 342
Country Name Indicator Name 2000Tanzania Income share held by lowest 10% 3%
Country Name Indicator Name 2007Tanzania Income share held by lowest 10% 3%
Country Name Indicator Name 2000Tanzania Poverty headcount ratio at $1.25 a day (PPP) (% of population) 85%
Country Name Indicator Name 2007Tanzania Poverty headcount ratio at $1.25 a day (PPP) (% of population) 68%
Country Name Indicator Name 2000Tanzania GDP per capita, PPP (current international $) 770
Country Name Indicator Name 2011Tanzania GDP per capita, PPP (current international $) 1512
Country Name Indicator Name 2000Tanzania Household expenditure per capita (current US$) 234
Country Name Indicator Name 2011Tanzania Household expenditure per capita (current US$) 342
Country Name Indicator Name 2000Tanzania Income share held by lowest 10% 3%
Country Name Indicator Name 2007Tanzania Income share held by lowest 10% 3%
Country Name Indicator Name 2000Tanzania Poverty headcount ratio at $1.25 a day (PPP) (% of population) 85%
Country Name Indicator Name 2007Tanzania Poverty headcount ratio at $1.25 a day (PPP) (% of population) 68%
< 50¢ 20%
0.0515%30%50%70%85%95%
Headcount ratioPPP‐$1.25 68%PPP‐$2.00 88%PPP‐$2.50 93%PPP‐$4.00 98%PPP‐$5.00 99%
0%
20%
40%
60%
80%
100%$0 $3 $6 $9 $12 $15
Cumulative share living o
n less th
an . . .
. . . the following US dollar amounts per capita per day
0%5%10%15%20%25%30%
under 7
5¢
$1.00‐$1.25
$1.50‐$1.75
$2.00‐$2.25
$2.50‐$2.75
$3.00‐$3.25
$3.50‐$3.75
$4.00‐$4.25
$4.50‐$4.75
over $5.00
Population split by actual $/day40%
So the detailed data goes into the background and we give members a really focused overview
Population split by poverty band How many actual dollars they live on per day Can even add / interpolate Findex data on percent served
Country Name Indicator Name 2000Tanzania GDP per capita, PPP (current international $) 770
Country Name Indicator Name 2011Tanzania GDP per capita, PPP (current international $) 1512
Country Name Indicator Name 2000Tanzania Household expenditure per capita (current US$) 234
Country Name Indicator Name 2011Tanzania Household expenditure per capita (current US$) 342
Country Name Indicator Name 2000Tanzania Income share held by lowest 10% 3%
Country Name Indicator Name 2007Tanzania Income share held by lowest 10% 3%
Country Name Indicator Name 2000Tanzania Poverty headcount ratio at $1.25 a day (PPP) (% of population) 85%
Country Name Indicator Name 2007Tanzania Poverty headcount ratio at $1.25 a day (PPP) (% of population) 68%
< 50¢ 20%
0.0515%30%50%70%85%95%
Headcount ratioPPP‐$1.25 68%PPP‐$2.00 88%PPP‐$2.50 93%PPP‐$4.00 98%PPP‐$5.00 99%
0%
20%
40%
60%
80%
100%$0 $3 $6 $9 $12 $15
Cumulative share living o
n less th
an . . .
. . . the following US dollar amounts per capita per day
0%5%10%15%20%25%30%
under 7
5¢
$1.00‐$1.25
$1.50‐$1.75
$2.00‐$2.25
$2.50‐$2.75
$3.00‐$3.25
$3.50‐$3.75
$4.00‐$4.25
$4.50‐$4.75
over $5.00
Population split by actual $/day40%
TanzaniaAdult population 25.5 mns mid‐market $0.80
Consumption/head (PPP$) 755Findex (top 60% / bottom 40%) 25% 6% by pov band
Population profiling Share pop. Con/day % srv % PUS
‐ extreme poor 68% $0.67 10% 61% ‐ moderate pov. 25% $1.31 20% 20% ‐ near poor 5% $2.25 69% 2% ‐ better off 2% $1.72 90% 0%
This is what lies behind our presentation of how much the poor spend by country ….
…. and we can cut this data in a variety of ways to illustrate the potential for new business models
Coming back to the challenge:Mass retail banking is such a fixed cost business (85% +) and high levels of dormancy mean the supply curve CANhelp us work our way down the demand curve profitably
Demand –v– Supply
… this is a real case of a bank whose active customer base has imploded and +/‐100k active customers are carrying a cost base designed for a million plus.
Quantity
Price
World Bank Brown Bag Lunch
Washington DC, Sep 2013
Stephen Peachey(Programme Adviser)
. . . . the sustainability challenge is to get members to take risks with pricing to get members’ banking offer to fit within an affordability envelope that works for the poor and gear up activity