Design a basic financial-services

offering for rural communities

Client goal
The Good Heart Foundation is a private organization that
aims at reducing extreme poverty worldwide. In this case
study, the foundation asked consultants to design a basic
financial-services offering for inhabitants of remote
communities in the Philippines.
• Description of situation

The majority of Philippines’s rural inhabitants are relatively poor, relying in part on
government benefits for their livelihood. As they tend not to have bank accounts, they
usually collect government benefits in cash from a limited number of state-bank
branches.
The government plans to acquire and operate a chain of 22,000 stores, throughout the
Philippines, called Suriana, which provide basic food, clothes, and other essential goods
to the rural population.

• McKinsey study

Your consulting firm has been asked to investigate and assess the possibility of using
the Suriana network to provide a basic set of financial services to supplement the
limited number of state-bank branches. The offer would start with dispensing
government-benefit payments and move progressively to include savings accounts, bill
payment, insurance, credit, and other financial products.
Question 1:

• What should the team investigate to determine whether the Suriana

network could and should be leveraged to provide a range of basic
financial services to the Filipino rural population?

• Helpful hints
• Take time to organize your thoughts before answering. This will help show
your interviewer that you have a logical approach and can think in an
organized way, regardless of the “accuracy” of the outcome.
• Develop an overall approach before diving into details.
Question 2:
• The team has estimated that it currently costs a family 50 pesos per month in
transportation and food to make the journey to collect their benefit payments. The
team also estimates that if benefits were available for collection at local Suriana stores,
the cost would be reduced by 30 percent.
• 20 % the Philippines’s population is rural, and of this number 50 % currently receive
state benefits.

• If all families could receive state benefits at their local Suriana stores, how much in
total per year would be saved across all Filipino rural families receiving state benefits?

• Your interviewer can provide you with the following information if requested:

• You can assume that the Philippines have a population of 100 million.
• You can also assume that families in the Philippines have four members, on
average, and that this does not differ by region.
Question 3: The team conducted a survey on a sample of the rural population in three different regions of the Philippines. What are your observations about this information, and how
would you explain these trends? :
Result of Population Survey on the Benefits of Using the Suriana Network
Question 4
• In a meeting with representatives of the state bank, they express
concern about how challenging it will be to offer basic financial
products to the rural population.

• One of the representatives mentions that these are regions where

people are poorly educated and unfamiliar with banking products, and
where there is a high degree of crime and fraud.

• He asks for the team’s thoughts about how the bank could sell these
services effectively to this population given the challenges.