Expanding Bank Outreach through Retail Partnerships : Correspondent Banking in Brazil

Expanding Bank Outreach through Retail Partnerships : Correspondent Banking in Brazil

This paper explores the extent to which formal, regulated financial institutions such as banks have been able to partner with "correspondents"- commercial entities whose primary objective and business is other than the provision of financ...

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Bibliographic Details
Main Authors:	Kumar, Anjali, Nair, Ajai, Parsons, Adam, Urdapilleta, Eduardo
Format:	Publication
Language:	English en_US
Published:	Washington, DC: World Bank 2012
Subjects:	ACCOUNT MAINTENANCE ACCOUNTING ACCOUNTING FRAMEWORK BANK BRANCHES BANKING LEGISLATION BANKING SECTOR BANKING SERVICES BANKING SYSTEM BRANCH BANKING BUSINESS ESTABLISHMENT CAPITALIZATION COLLECTION COLLECTION SERVICES COMMERCIAL ENTITIES COMPANY COOPERATIVES COPYRIGHT CORRESPONDENT BANKS CREDIT ANALYSIS CREDIT CARDS CREDIT RISK CREDIT UNIONS DATA PROTECTION DEPOSITS DOI ELECTRICITY ELECTRONIC BANKING FINANCIAL INSTITUTION FINANCIAL INSTITUTIONS FINANCIAL SERVICES FINANCIAL TRANSACTIONS FIXED COSTS FRANCHISE FRANCHISES INSURANCE INTERNET USE LABOR COSTS LEGISLATION LEGISLATIVE FRAMEWORK LIABILITY LICENSES LIMITED LIQUIDITY LOTTERY MICROFINANCE MUNICIPALITIES MUNICIPALITY NATIONAL BANK NETWORKS PARTNERSHIP PAYMENTS PERSONS POSTAL SERVICES PRIVATE BANKS PRIVATE CONTRACTS PUBLIC PUBLIC CONTRACTS PUBLIC UTILITIES RETURN ON INVESTMENT RISK MANAGEMENT RISK SHARING SAVINGS SAVINGS ACCOUNTS SAVINGS BANKS SERVICE DELIVERY SMALL BUSINESSES SMART CARDS SUBSIDIARY TAX TELEPHONE SERVICES UNION
Online Access:	http://documents.worldbank.org/curated/en/2006/06/6838533/expanding-bank-outreach-through-retail-partnership-correspondent-banking-brazil http://hdl.handle.net/10986/7038

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Summary:	This paper explores the extent to which formal, regulated financial institutions such as banks have been able to partner with "correspondents"- commercial entities whose primary objective and business is other than the provision of financial services. The paper illustrates the case of Brazil, where banks recently have developed extensive networks of such correspondents. Such arrangements result in lower costs and shared risks for participating financial institutions, making these arrangements an attractive vehicle for outreach to the underserved. Correspondent banking requires an enabling environment to emerge, and poses some regulatory challenges and some increase in risk. While there are reasons why this model was particularly successful in Brazil, it may be replicable elsewhere if appropriate regulatory adjustments are undertaken.