Agents are Key to Financial Inclusion

Posted on July 02, 2013 by Sumita Kale

Human mediation is a vital process for any mobile money service to garner universal acceptance and consequently for increasing its market penetrationAs discussed in a MicroSave study- Mobile Money- Influencers of Success,- there are two essential components of human mediation–a) registration process and b) account openingService providers such as GCash and M-Pesa ensure ease of conducting such processes for the financially excluded poor by engaging intermediaries such as sales agents, or agents on the ground.  This provides the much needed initial handholding to low income customers and as agents are usually hired from their locality i.esome one that low income customers know and can identify with, it imbibes the poor with a sense of trust for such services.

An excellent example of human mediation model for promotion of mobile banking is the one adopted by Wizzit in South Africa Wizzit Payments Ltda provider of basic banking services for financially excluded in South Africa, has employed an effective model of human mediation whereby it engages jobless people called Wizzkids to reach out to the unbanked potential customersMore often than not these Wizzkids belong to the community in which they work and provide continuous support to customersHowever, remuneration of Wizzkids is devised such that they are not only motivated to get greater number of new accounts but to ensure that these accounts are aptly utilizedBesides receiving a commission that is a portion of the account opening charges, they also receive some annuity income based on the transaction levels in the accounts opened by themThis model of agent payments puts in place an efficient model of human mediation where agents are motivated to provide continuous support to the poor in becoming adept in the m-technology and optimally using mobile money services.

Agents like Wizzkids not only reach out to those who are considered inaccessible by banks due to high transaction cost and lack of profitable business proposition, but also provide a very vital link between financially excluded sections and the formal financial sectorAccording to Mukesh Sadana, senior specialist, MicroSave, (Why Tech-based Banking cannot Replace Agents for Financial Inclusion) "agents play a very crucial role in educating low income customers, many of them experiencing technology enabled banking for the first time. He notes that research studies conducted by MicroSave have time and again shown that low income customers prefer approaching an agent point than visiting a bank as the former deals with them with respect and special attentionTherefore despite all the focus on technology in financial inclusion initiatives, for financial inclusion to materialize via the route of mobile money services, human interface through agent customer relationship is irreplaceable by any technology in the near future, as it enables universal adoption and subsequent optimal use of mobile money services by poor and financially excluded population sections.


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