Archive for: Agents

Following on from last week’s post on the concept of ‘mediated use’ - asking someone to complete all or part of a task that the user is unable, or unwilling to do - how motivated are agents in helping customers complete all or some of the task?

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Last week at the Mobile Money Summit I had the pleasure of moderating a discussion with Daryl Collins (co-author or Portfolios of the Poor) and Olga Morawczynski (now with Grameen Foundation’s AppLab in Uganda  — Olga and I also co-authored a brief on M-PESA customers last year, based on Olga’s PhD research).

I worry some mobile money providers won’t see the volume of transactions they want to justify the investment, unless they go beyond offering a simple liquid wallet and mobile remittances. If they can get traction with a value proposition like Safaricom did, with 45% of the population signing up — then great. But Kenya was a market where everything aligned just right, not least of all the very poor competition M-PESA faced from banks, bus companies and the post office. We’re seeing that few countries offer such dramatic opportunities.
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This morning in Nairobi, Safaricom and Equity Bank were joined by Kenyan President Mwai Kibaki as they announced a new product called M-Kesho, an interest-bearing savings account. Kenya’s 9.4 million M-PESA users will have access to mobile microsavings, microinsurance, and other banking services with Equity Bank,  a CGAP project partner.

If M-PESA has given millions of Kenyans a safe, cheap alternative to carrying cash, then today’s new service, M-Kesho, will give millions of Kenyans a safe, cheap alternative to keeping cash under the mattress. CGAP is supporting Equity Bank to learn more about how to deliver savings accounts to poor, unbanked people. The Technology Program at CGAP is co-funded by the Bill & Melinda Gates Foundation, CGAP, and the UK Department for International Development.

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photo by Claudia McKay

In the past few weeks, my colleagues have blogged about our study of agent networks in India.  You can see our overall analysis of agents (called CSPs or Customer Service Points in India).   The India research was one part of a three-country study (along with Brazil and Kenya) that highlights the critical role agents play as the key interface between branchless banking providers and customers.

In this post, we look closely at FINO. FINO has 10,000 agents, distributed across 25 different initiatives with nearly 40 financial institutions, with more than 13 million registered users accessing a range of products from no frills saving accounts to NREGA government benefits to microloans and insurance.

FINO started life as a firm focused on banking technology, but necessity has forced FINO to become skilled in agent network management as well. By some measures, FINO is the world’s largest agent manager. FINO is putting together some tools we’ve not seen in Brazil and Kenya, countries which get a lot more attention in branchless banking.

FINO’s solution starts with something deceptively simple. Every field staff member sends a SMS to headquarters when they leave home and head for the field each morning: almost like taking attendance. FINO then melds this with transaction data showing when and where field staff meet agents, and the transaction details of agents and customers, yielding a massively data-rich mash up which FINO color-coordinates, uses to generate scores for every staff member, and makes sortable. The end result converts tens of thousands of data points into an easily absorbed visual interface. And this is all online, easily accessible to FINO staff.

When I saw it, it comes across as a system designed to provide not perfect information, but “good enough.” For instance, a dishonest staff member could send a text from bed saying he was in the field. But as FINO’s Jatinder Handoo puts it, “You cannot lie forever.” Absences will appear. Other data will show that staff person’s agents do not perform as well, that clients don’t transact as often.

The key is pattern recognition. That’s where the color coding, scoring and sortability of FINO’s system comes into play. The worst performers slide to the bottom, and two staff in headquarters in Mumbai are able to follow up over the phone, typically on the same day. FINO can also single out the best agents to examine more closely. In the long run, this should provide a goldmine of data helping FINO improve its agent networks, and ultimately the quality of financial services it delivers for its partners.

-Mark Pickens

In the past few weeks, my colleagues have blogged about our study of agent networks in India. You can see our overall analysis of agents (called CSPs or Customer Service Points in India) here. The India research was one part of a three-country study (along with Brazil and Kenya) that highlights the critical role agents play as the key interface between a branchless banking service and its customers.

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I’ve been part of a CGAP team working on a three-country study of agent networks over the last several months.  We blogged about our time in Brazil earlier this year, and you can download the deck with our analysis of agents here. We also did some analysis of M-PESA agents last year, and we will be updating this information in the coming weeks.

More recently, however, I was joined by colleagues Karuna Krishnaswamy, Claudia McKay, Mark Pickens in India talking to FINO and Eko, along with other companies involved in different forms of branchless banking. Over the next few weeks, we’ll be blogging about various aspects of our time there. You can see our overall analysis of agent networks in India in this deck.

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This is part of a series of blog posts we are doing based on new research about business correspondents (agents) in India.   The India research was one part of a three-country study (along with Brazil and Kenya).

A notable difference in the role of banking agents (also called Customer Service Providers or CSPs) in India compared to other countries is that the agents are responsible for customer acquisition in addition to processing transactions.

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photo by Claudia McKay

The regulatory changes made in India last year have uncorked a stream of new branchless banking launches. Three new providers have or are just about to go to market.

• Yes Bank launched a mobile money product powered by Nokia and Obopay technology.
• Paymate’s Green Mobile offers remittances, including via local payphone operators, meaning clients don’t even need to own a phone.
• And an (unnamed) mobile operator is hatching plans to go to market with a bank partner.

They join three other firms who have been beavering away at branchless banking and are now gearing up for big growth: FINO, Eko, and A Little World.

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A mobile money agent in Sierra Leone. Photo courtesy of Ben Lyon

Ben Lyon is the Founder and Executive Director of FrontlineSMS:Credit, an organization committed to bringing financial services to the entrepreneurial poor in 160 characters or less (the length of a standard text message).  Ben specializes in informal economics, microfinance and mobile payments and is especially interested in where the three subjects converge.  Learn more about FrontlineSMS:Credit at http://credit.frontlinesms.com.

Agents are the face and frontline of any mobile money system.  Often termed ‘human ATMs’, agents are present every time a user wants to put cash in, or draw cash out, of a system.  Given their critical importance, it only seems prudent to ask “What are the incentives that govern agent behavior?” A review of Splash Mobile Money Limited (Splash) and Zain Zap in Sierra Leone is instructive.

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To promote effective regulation of branchless banking, especially mobile banking, CGAP, DFID, and the Alliance for Financial Inclusion (AFI) have organized the third Global Leadership Seminar for high-level policymakers and regulators who set policy for branchless banking, including mobile banking. CGAP’s Technology Program and AFI are supported by the Bill & Melinda Gates Foundation. This week we’re blogging from the seminar, where the conversation has focused on technology, but also business models and especially distribution networks. A session on banking agents was chaired by Ignacio Mas of the Bill & Melinda Gates Foundation. The broad consensus was that agents (so far) have not created significant risks for consumers or the soundness of any banking system among the countries where agents are doing cash-in cash out transactions.

It is easy to slip into a shorthand vocabulary when dealing with a technical issue like mobile banking. Is that a challenge when we talk about agents?
For me, the key word is distribution. That’s the main problem we are trying to solve. It means two things. First, getting services closer to the customers – proximity. The second is being able to conduct smaller transactions affordably. Those two together are a basic enabler to serve poor people. Solving the problem of distribution is solving a business case and getting closer to the customers with the ability to do small transactions. In general, the broad solution to us seems to be to take banking transactions outside of traditional bank infrastructure, which is why I prefer to say that we are seeking “banking beyond branches” rather than “branchless banking.” Branchless banking cannot work without branches. The small store doing cash-in/cash-out transactions still has to go somewhere to get rid of the excess cash – and that’s usually a bank branch. So it actually isn’t branchless at all. The objective is to create outlets for people to transact in every town and village.

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