Unnetworked retailers: growing channel for financial services distribution?

Agent networks are critical for expanding access to financial services in developing countries. They enable providers to offer viable cost-effective financial services at scale in developing countries reaching previously unserved and underserved adults. Focus has traditionally been placed on networked agents, but increasingly providers are recognizing the potential of agents that exist outside of formalised networked retail chains and are independently owned and operated.

 

There are many common elements that make up independent retailer agent networks and yet worldwide these networks are showing different compositions and development paths. FinMark Trust commissioned Cenfri to explore the creation and effective management of these networks for the distribution of financial services. 

 

Please click here to download the presentation on unnetworked retailers as agents (PDF, 1.58MB)

 

Cenfri has continued this work into a study supported by the FinMark Trust. The study identifies that a key differentiating factor between networks is the profile and objective of the company that originates the network. The nature of the originating entity will impact a number of key components of the agent network business model, including the product(s) being provided, the size of the network, the agent management structure and the choice of technology applied

 

Please click here to download the Bread, Milk and Banking study (PDF, 1.1 MB)

 

The study identifies five main network typologies based on the institutional type of the network originator. The typologies are as follows:

  • Fast Moving Consumer Goods (FMCG) distributor led,
  • Financial Services Provider (FSP)-led,
  • Government-led
  • Mobile Network Operators (MNO)-led
  • Payment Systems Providers (PSP)-led

 

These typologies are explored through seven case studies, including examples from Colombia, Mexico, South Africa, Tanzania and Zambia. By understanding the challenges and successes of a number of agent networks, across different locations, key lessons can be extracted for the effective provision financial services through this channel. It is a tricky business model to get right, but when it succeeds, these networks open up local financial access points for markets that were previously inaccessible. The emerging key lessons were are as follows:

  • Identifying a sustainable agent profile is key,
  • Agents should be regarded as customers,
  • Active agent management is critical for a sustainable and valuable service offering, and
  • Trust is vital for both customer and agent retention – and trust requires dependability

Additional Info

  • Country: Colombia, Mexico, South Africa, Zambia, Tanzania
  • Institution: FinMark Trust
  • Date Published: 2015
  • Document Type: Presentations
  • Author/s: Catherine Denoon-Stevens

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Unnetworked retailers: growing channel for financial services distribution?

Agent networks are critical for expanding access to financial services in developing countries. They enable providers to offer viable cost-effective financial services at scale in developing countries reaching previously unserved and underserved adults. Focus has traditionally been placed on networked agents, but increasingly providers are recognizing the potential of agents that exist outside of formalised networked retail chains and are independently owned and operated.

 

There are many common elements that make up independent retailer agent networks and yet worldwide these networks are showing different compositions and development paths. FinMark Trust commissioned Cenfri to explore the creation and effective management of these networks for the distribution of financial services. 

 

Please click here to download the presentation on unnetworked retailers as agents (PDF, 1.58MB)

 

Cenfri has continued this work into a study supported by the FinMark Trust. The study identifies that a key differentiating factor between networks is the profile and objective of the company that originates the network. The nature of the originating entity will impact a number of key components of the agent network business model, including the product(s) being provided, the size of the network, the agent management structure and the choice of technology applied

 

Please click here to download the Bread, Milk and Banking study (PDF, 1.1 MB)

 

The study identifies five main network typologies based on the institutional type of the network originator. The typologies are as follows:

  • Fast Moving Consumer Goods (FMCG) distributor led,
  • Financial Services Provider (FSP)-led,
  • Government-led
  • Mobile Network Operators (MNO)-led
  • Payment Systems Providers (PSP)-led

 

These typologies are explored through seven case studies, including examples from Colombia, Mexico, South Africa, Tanzania and Zambia. By understanding the challenges and successes of a number of agent networks, across different locations, key lessons can be extracted for the effective provision financial services through this channel. It is a tricky business model to get right, but when it succeeds, these networks open up local financial access points for markets that were previously inaccessible. The emerging key lessons were are as follows:

  • Identifying a sustainable agent profile is key,
  • Agents should be regarded as customers,
  • Active agent management is critical for a sustainable and valuable service offering, and
  • Trust is vital for both customer and agent retention – and trust requires dependability

Additional Info

  • Country: Colombia, Mexico, South Africa, Zambia, Tanzania
  • Institution: FinMark Trust
  • Date Published: 2015
  • Document Type: Presentations
  • Author/s: Catherine Denoon-Stevens

Search news, publications and events