Conference on Business Correspondent Model for Financial Inclusion Lessons Learnt and Mapping the Future at the College

e of Agricultural Banking, RBI, Pune, August 16-17, 2012 Financial Inclusion: State of the Sector
Technology Liquidity Management Compensation Fraud & Risk Management
Supporting

Quality of Service
To develop the business case for agents it is Products imperative to improve the quality of service by working onto improve five critical parameters i.e. compensation, cash management, technology, operations support and marketing Supporting

Training Operations & Technology Support Customer Care Marketing & Branding

Profits E/Academy

Agents perspective

Social Status
Support in social recognition of agents by providing identity card, confirmation letter etc

Defining a right mix of products

Agent banking in India still faces many fundamental challenges. The quality of services delivered to the customers is a function of the several factors such as product mix, technology, operations support and adequate and regular compensation to the agents. Currently these factors are not favourable enough to motivate agents to deliver quality services to their customers:

1. Agents are often provided only one product to sell, and thus are too Product Mix The right mix of Enabling Enrolments Enabling dependent on a mono-product for transactions and Transactions customer acquisition to the success or survival of their increase the revenue for business. Urban agents mainly focus the agent only domestic money transfer (instant or near real-time) and have reduced efforts to open no frills accounts (NFAs) for customers. According to MicroSave research,1 in 62% cases urban agents are offering remittances, whereas only 33 % urban agents are also opening and servicing NFAs. Rural agents are typically dependent on revenues from delivery of government payments to beneficiaries which are uncertain and variable in nature.
Business Case

2. Agent commissions are delayed by 3-4 months for most of the rural agents. Of the total agents studied, 43% were getting delayed commissions, and all of these are located in rural areas. Urban agents covered under study are receiving commissions on time (typically real-time or monthly). Delay in commission limits customer acquisition and transaction efforts by agents. 3. Network downtime is quite frequent in rural areas, affecting transactions. Network reliability is low and connectivity is still limited or at times non-existent in several rural areas. Even with offline transactions, intermittent connectivity is required to enable synchronisation of transactions. In many cases the POS machine/terminal does not work properly and requires repairs/service. Often it takes 2-15 days to resolve such technical problems encountered, during which consumers do not receive any service.
4.

Inadequate support from bank staff. Frequent visits by bank staff and lending appropriate support can help customer acquisition and business growth. Nearly 80% of the urban agents have never been visited by the bank staff. Some rural agents have been visited once or twice by bank staff, however on-going support from banks is lacking in most cases. Regular monitoring of agents is a challenge for many BCNM organisations, especially NGOs that typically operate in one to two districts, as they lack dedicated qualified staff and financial capabilities to manage the agent operations on a continual basis.

5.

MicroSave Agent Assessments and Agent Journal Studies, 2011, 2012

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