Agent Networks

Agents represent the frontline of any branchless banking service. From wherever they operate, they enable customers to transact – often by turning cash into e-money and back again. Agents play a critical role not only in handling transactions but in identifying, acquiring, and educating new customers, as well as delivering a customer experience that keeps customers coming back.

Financial service providers around the world – from Brazil and Mali to India and the Philippines – are using agents more and more to distribute financial services. Nearly all of the 215-plus branchless banking operations worldwide rely on agents as the main way to sign up and service customers. At least six countries have more than 100,000 agents, and Brazil tops the list with its Central Bank reporting 377,000 agents as of January 2015.

Shifts are also underway. Latin America and Asia, regions typically served by bank agents, are seeing an emergence of agents working for mobile money operators and other non-bank providers. The reverse is true in Africa, with bank agents expanding where non-bank, mobile money agents used to be the norm. CGAP has also observed a growing diversity of actors in the agent value chain, including new types of agent aggregators and agent network managers. And in countries such as Pakistan and Tanzania, heavy competition in the market is leading to significant increases in what are called shared agents, in which one agent services the transactional needs of multiple financial service providers.

These changes in the market are impressive, exciting, and could go a long way toward advancing and deepening financial inclusion among the poor. At the same time, the use of agents can trigger operational, technological, legal/compliance, reputational, and other risks that should be appropriately managed.

The traditional branchless banking model is evolving, with regulation assuming a central role in enabling – and sometimes limiting – its spread. For example, while there is no single formula to building and ensuring a viable network of branchless banking agents, certain key elements have become clear. For one thing, as the human frontline to any branchless banking service, agents must not only comply with Know-Your-Customer (KYC) standards set by their national regulators but also help guard the entire system against fraud, encouraging customers' trust in the service. In addition, branchless banking services must provide customers with access to cash when they need it. Therefore, agents play a critical role in liquidity management by keeping adequate stocks of both cash and e-money to enable clients to transact. And as the first point of contact, agents help bridge the gap between high-tech service and low-literacy clients.

CGAP has produced materials and toolkits on several critical issues related to agent management in order to help providers and policymakers continue to develop viable agent distribution channels. Such channels are critical to serving the poor while simultaneously protecting consumers and the stability and integrity of financial services.


Contact: Wameek Noor


21 November 2017
This diagnostic provides an analysis of the regulatory framework for DFS in Côte d’Ivoire, including its coverage, conducive features, and gaps and obstacles. The paper also offers recommendations on how to address these issues.
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English (57 pages) | French (62 pages)
25 September 2017
This Working Paper explores three approaches banks in Kenya have used to respond to mobile money. While nonbank mobile financial services can fundamentally reshape the financial sector in a developing market, as they have clearly done in Kenya, mobile services need not represent an existential threat to the traditional banking industry.
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English (12 pages) | French (14 pages)

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