As agents represent the first and most tangible touch point for most digital financial service (DFS) customers, there is little doubt that having an effective agent network is key to the success of any DFS provider’s operations. Research published by The Helix Institute of Digital Finance in 2015 suggests that agent networks are also probably the most operationally burdensome and costly element of the DFS value chain, and have been shown to cost between 40% and 80% of the revenue generated from the business. This finding means that, if providers are not diligent, their agent networks can end up costing them more than they are worth.
On Day 3 of the #DFS4Women event, Nandini Harihareswara, Regional Technical Specialist for Mobile Money for the Poor (MM4P) programmes in Malawi and Zambia, moderated a session on ‘Improving classic agent network challenges with and for women.’ The session was facilitated by Junior Kwebiiha, DFS Expert for MM4P Zambia, Melissa Rousset from Helix Institute and Venkata Atluri from MicroSave.
Ms. Harihareswara opened the session by inviting participants to share some of the key challenges they are facing in their markets in terms of growing and sustaining their agent networks. Some of the recurring challenges they reported included the following: managing liquidity and rebalancing, especially in rural areas and also pertaining to agents diverting capital for other purposes than their mobile money businesses; literacy levels of agents and tellers; the gender gap that still exists between male and female agents; connectivity issues that hinder the provision of quality services in areas where the network is bad; agent training with regards to cost, content and methodology of the training approaches used; and lastly, agent profitability.
At this point, Ms. Harihareswara asked participants to reflect on some of the lessons they learned on Days 1 and 2 of the event. On Day 1, some of the participants had the chance to attend the session ‘Agents: Why focus on women?’ There, they received information on women agents and women customers backed by research and experience from providers and agents in different markets. Research and implementation suggest that, compared to male agents, women agents are more profitable, focused and fiscally responsible, provide better quality services to their customers, and are perceived to be more trustworthy and loyal. On Day 2, all participants joined a field exercise in which they were able to use an innovative data collection tool developed by Optimetriks to capture pertinent information on agents and customers, including women.
After reflecting on Days 1 and 2, Ms. Harihareswara invited audience members to engage in an intensive thought exercise about how they could leverage the assets of women—as agents and customers—to solve some of the agent network challenges they had identified at the beginning of the session. The facilitators were on hand to steer the discussion of participants, who were separated into small groups, and help them think through their ideas in a logical manner. At the end of the exercise, participants from each small group shared their results with the whole group.
The first group presented savings groups as one solution to the agent liquidity issue, including in rural areas were savings groups are common and heavily populated by female members. The reasoning behind this approach is that savings group members have accounts at banks and could translate their balances into e-value and keep their cash equivalent in banks. The banks could then potentially support any member of the savings group who wanted to become an agent. A representative from Catholic Relief Services (CRS) who was in the audience invited any other participants that were interested in linking savings groups to formal financial institutions to consult with CRS, as it has done some studies on mapping savings group locations and characteristics in different regions.
The second group tackled the issue of training and suggested ways to make trainings more cost efficient and effective. One idea was to conduct trainings via videos shared through mobile phones. Another was to identify key agents within different communities who could take on the responsibility of training a set of agents. One provider brought up the key point that providers should explore ways of providing trainings in local languages to make them easier to understand and remember. Building off the lessons from Day 1 and the fact that women are considered trustworthy and also more patient and empathetic, providers could use this solution as a means of recruiting and training women ‘super agents’ who in turn could recruit and train more women agents and tellers. The group also suggested using fraud teams to help women agents who have been identified as being high risk and easy targets for fraud. Agent forums were also suggested as a means of disseminating important information throughout agent networks, since information is more likely to be well received from a peer than from a provider in a suit. Lastly, the group suggested that agent networks could be made more inclusive by inviting men to come with the women in their networks and providing incentives for women to become agents.
The last group focused on how to be more deliberate in the agent recruitment process so as to capture and retain more women agents. The group suggested that one approach could be to develop a more complete understanding of the life cycle of a woman to identify at what points she is most likely to be receptive to the idea of becoming an agent, the reasons why her agency business could become dormant and what could be done to help address these pain points. One suggestion to involve more women was to make the on-boarding process a bit less intense and also more incentivized. Another suggestion was to identify women influencers in the community and use them to target potential women agents through churches, savings groups, etc. It all boiled down to developing a value proposition for women and why they should become agents.
After this exercise, the group from Helix Institute briefly shared some of their knowledge on innovative agent models currently being tested in various markets. In the first model, the shared agent network model, the same set of agents serves a group of providers through the technology platform of the shared agent network provider. The providers’ role is limited to signing up and managing the performance of the agent network. This model is currently being used by MobiCash in Bangladesh, where the network has over 30,000 agents and partners with six different banks. In the second model, the roving agent model, agents provide doorstep service to customers. The group pointed out that most of the activities of roving agents seem to be focused on gaining new customers and educating them on the use of the services offered. A successful implementation of this model is in Pakistan where Telenor uses roving agents to market its mobile money product, Easypaisa.
The third and probably the most innovative agent distribution model in the market at the moment is the Uber-type model for cash-in/cash-out agents. What’s interesting about this model is that it enables customers to act as liquidity merchants, mimicking what Uber has done for transportation. In India, Eko is currently trying out this model by using its Fundu app to match customers who want to cash out with customers who can enable such transactions. The jury is still out on how much traction this model is likely to gain over time.
By the end of the session, participants left with the following key take-aways: they had identified the key challenges facing their agent networks and brainstormed a number of ways in which women might help solve some of these problems; and, they left with an idea of some of the innovative ways in which other DFS markets are structuring their agent networks. The challenge remaining is to see what they will they choose to do with all this information and what steps will they take towards incorporating women agents when it comes to restructuring their agent networks to increase customer acquisition and profitability.
October 2016. Copyright © UN Capital Development Fund. All rights reserved.
The views expressed in this publication are those of the author(s) and do not necessarily represent the views of UNCDF, the United Nations or any of its affiliated organizations or its Member States.