Mapping Distribution Channel Taxonomies for Financial Inclusion: A Framework for Government-Backed Savings Programs in Remote Communities

Abstract

Provision of formal financial services to geographically distant and irregular-income populations is a major challenge, especially to government-led savings programs in marginalized locations like remote fishing communities. This paper elaborates a formalized classification of delivery and distribution channels such as agent-based banking, mobile financial systems, partnership with local retailers, and community-based mechanisms and customized to meet contextual constraints and incentives. The proposed framework offers a systematic trade off analysis of these channels, by integrating a concept innovativeness perspective, according to their coverage capacity, cost efficiency, customer outreach, and contextual adaptability. The results indicate that hybrid designs involving the combination of mobile technologies and agent networks are better in terms of balancing outreach and operation costs. Also, collaborations with local organizations and civic groups increase the level of trust, which positively contributes to a higher adoption rate, in particular, in those areas where the level of digital infrastructure is low, but the level of social cohesion is high. The taxonomy provides a wide and flexible framework leading to the context-sensitive decision-making. It offers practical information to the policymakers and practitioners to manoeuvre well through the operational, socio-economic and political factors. Finally, the study provides a versatile and methodical way of maximizing channel strategy that can help re-incorporate underserved populations into formal savings channels.