Financial Services (105)
Baby banking steps
The Abu Dhabi Islamic Bank launched a product named ‘Banoun’ which is an account for children aged 8 and above. To appeal and grab their imagination, they created a character called Darhoom that tells the kids stories about how to save and manage their allowance.
Why it matters
Not only does this program help kids understand the concept of finance at an early age, it encourages parents to become more responsible by investing into their kids’ future. While this concept may be familiar in many western markets, it’s an innovative one for an Islamic bank in the Middle East. Will this encourage all other banks to open up to a new, even younger, Arab generation?
Barclays bank has set an interesting website for its clients – the Barclays Circle. It’s presented as a social media platform where customers can interact instantaneously with their bank, but also with other customers. Users can get the opinions of banking experts and other customers on financial products and services, as well as give their own opinions.
One of the biggest challenges that poor urban entrepreneurs face is lack of access to capital. Banks and financial institutions are hesitant to lend to these individuals due to credit risk and small money lenders charge almost usurious interest rates. State Bank of India has developed a unique model where small sums (sometimes as low as $100) are loaned to individuals who form ‘Self Help Groups’ that together add up to a significant corpus. The bank benefits because the default risk is spread across multiple individuals in same social circle. Additionally peer pressure helps to prevent defaults.