Banking agents, i.e., retail and postal outlets processing financial transactions on behalf of banks, seem to be the theoretic solution to reach new geographies and new client segments with banking services. Low population density with low transaction volumes, and low-income clients demanding small value transactions often require new distribution channels and do not justify building branches.
Having looked at quite a number of banking agent networks in countries including Brazil, Colombia, Kenya, Pakistan, Peru, South Africa, and others, my ex-colleague and I summarized our thoughts and analysis of current agent networks and how the channel could reach even more and poorer clients. All this has now been published by CGAP in a new publication “Banking Through Networks Of Retail Agents.”
The main areas we tackle are:
– What are agents? What is their main economic role?
– In what ways can they support banks’ commercial and channel strategies?
– How do you set up and grow agent networks?
– What is the business case and remuneration model for agents?
For those eager for country information, the document provides a 9-country league table on page 3, a list of agent regulatory environments for 5 countries on page 6, an in-depth analysis of agent networks in Peru, as well as an illustrative example on how transaction and cash volume develops in an agent network.