|
|
|
|
|
|
|
The Business Case
|
|
|
|
In any distribution channel strategy, the business model needs to work for all parties involved. Otherwise the model is not sustainable and either the contract will need to be renegotiated or one of the parties will not have adequate incentive to continue developing the channel. Indeed, in the early days of agent networks in Brazil, the system suffered from very high agent turnover attributable at least in part to the unrealistic expectations many agents had about the profit the agent business would generate.
|
|
|
Network Set Up and Expansion
|
|
|
|
Almost any retail outlet with a cash drawer can potentially become a banking agent. Each bank needs to define its own agent selection criteria based on its own commercial strategy and its risk management rules and systems. However, from our observations, the following general categories of criteria seem to be the most widely used:
|
|
|
Channel Strategy
|
|
|
|
A branch is usually a “one-stop shop” for financial services. Customers can come in to perform transactions, buy new products, solicit financial advice, or record a complaint. Branches often also house an outbound team for sales or credit recovery. An ATM, on the other hand, is purely a transactional channel. A banking agent is closer to the ATM setup in that it fulfills a primary role of transaction processing. Yet, in all but the first model of agents, the strategic intent is to roll out agents as part of a broader strategy— to target new customer segments, to serve new geographies, or to avoid having to set up own points of sale and service.
|
|
|
|
|
|
|
|
|
Winners of Round Three of the PPIC
|
|
May 6, 2008
|
|
Alternativa Solidaria (AlSol) originally only offered savings and credit services to women in the violence- and poverty-ravaged state of Chiapas. However, when several clients died and their families have had to liquidate assets and go into debt in order to pay for burial services, AlSol decided to design a microinsurance product for this vulnerable population. In partnership with Zurich Insurance, it now offers $1,000 of life coverage for a $10 annual premium. The insurance company processes applications of groups of 125, and AlSol collects weekly premiums of 20 cents from its clients to pay for it.
|
|
|
Mobile World Congress
|
|
|
|
The 2009 Mobile World Congress is expected to attract approximately 50,000 attendees, so don’t miss this unrivalled opportunity to conduct business, discuss the hottest trends in mobile communications, and help define the industry’s path to continued growth. (February, 16-19, 2009)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Branchless Banking in 2020
|
|
|
|
How can government and private sector most affect the uptake and usage of branchless banking among the unserved majority by 2020? CGAP and DFID have begun a scenarios exercise to engage policymakers and leaders in telecoms and finance better understand what the next-generation issues might be in expanding access to finance using technology channels such as mobile phone networks and cards
|
|
|
CGAP Donor Information Resource Centre
|
|
May 7, 2008
|
|
The CGAP Poverty Assessment Tool provides transparency on the depth of poverty outreach of
microfinance institutions (MFIs). It provides rigorous data on the levels of poverty of clients
relative to people within the same community through the construction of a multidimensional
poverty index that allows for comparisons among MFIs and across countries. It has been
primarily designed for donors and investors who require a more standardized, globally applicable
and rigorous set of indicators to make povertyfocused
funding decisions. The tool involves a
survey of 200 randomly selected clients and 300 nonclients to ensure a balance between
reliability and the high costs associated with much larger surveys. The Poverty Assessment Tool
should be used in conjunction with other appraisal tools (such as the CGAP Appraisal Format) to
ensure a holistic understanding of MFIs.
|
|
|
Country Examples
|
|
|
|
Financial institutions in different countries, but especially in Latin America, have started to use banking agents to reach more clients, increase their coverage, or simply to draw clients out of their branches. Brazil is probably the most developed market when it comes to using banking agents as a way to increase financial system infrastructure. Already in 1999 the government enabled the use of agents by financial institutions and today more than 75 institutions operate a network of more than 95,000 agents that cover each municipality of the country. Within only 5 years, the banking agent network facilitated 12.4m new bank accounts and today the network comprises 56% of all points of sale in the Brazilian financial system.
|
|
|
|
|
Customer Adoption
|
|
|
|
Potential agent network clients in developing countries either have never had access to financial services or only used branches to access their accounts. In Brazil for example, the 95,000 point strong agent network covers each municipality of the country, but the network is almost exclusively used only for bill payments. “Users” have not yet transitioned in full banking “customers” who also save money through this new channel. Thus, providers have to allay clients’ concerns that their transactions at the agent might be less secure than at the branch, as well as educate clients around financial product use, its terms and prices.
|
|
| |
| |
| | 1 | 2 | next page |
| |
|
|
