CGAP is an independent policy and research center dedicated to advancing financial access for the world's poor. It is supported by over 30 development agencies and private foundations who share a common mission to alleviate poverty. Housed at the World Bank, CGAP provides market intelligence, promotes standards, develops innovative solutions and offers advisory services to governments, microfinance providers, donors, and investors. Learn more about CGAP at http://www.cgap.org/p/site/c/aboutus/. CGAP’s Technology Program (which is co-funded by the Bill & Melinda Gates Foundation and DFID) supports the development of branchless banking around the world. We do this in a variety of ways including advising private sector actors on business models. advising regulators, and creating new knowledge capital on practical challenges confronting the sector. Find out more about CGAP’s Technology Program at http://www.cgap.org/p/site/c/tech/.
MAIN MESSAGE: The CGAP Toolkit is based on more than a year of research in 3 countries where branchless banking has taken off in a large way (Brazil, Kenya) or is poised to do so (India). CGAP conducted in-depth interviews with 466 agents and analyzed data on 16,000 more. CGAP also held discussions with more than two dozen agent network managers (ANMs) and providers.
MAIN MESSAGE: We think a useful way to frame this is as a risk-return curve, set by the remuneration received and direct costs of being an agent. On one side of the curve (left side) the costs involved are too high for the remuneration received, and prospective agents will not agree to be an agent or will quit. On the other side (right), the remuneration is adequate compared to the costs and agents will participate.
MAIN MESSAGE: The agent business case is a multi-faceted puzzle, involving all of these drivers. But understanding which drivers matter most will differ, and is a main reason why it is critical to have a specialized ANM – either an in-house unit or outsourced to a partner – who will track the evolution of these factors.DETAIL: Not all of these factors will matter in your service, or matter to the same extent. At the time of service launch, it may be possible to find the first cohort of agents from among more well-resourced merchants who have their own sources of capital to draw on. But as the network expands, smaller merchants may need to borrow to accumulate capital to prefund their accounts and make other upfront investments (e.g. in security). Thus, cost of capital may not become an issue until later. To take another topic, in high crime societies robbery risk may be something which prospective agents are very concerned about from day 1, but in a lower crime society it may not become a problem until after the service reaches massive scale (at which time criminals may notice). To take a third issue, the benefit of foot traffic may be something that merchants will only recognize after their have become agents and seen increased numbers of customers for themselves. By contrast, the benefit of being associated with a strong brand may be something agents understand immediately.It is critical to have a specialized ANM – either an in-house unit or outsourced to a partner – who will track the evolution of these factors.
MAIN MESSAGE:ANMs play a key role in helping agent networks scale quickly while providing high-quality, consistent service. There are three roles ANMs can take to support agents: agent start up, agent operations, and business strategy. DETAILS: Since agent management is such a critical piece of a successful branchless banking system and yet is so difficult to get right, most providers ask ANMs to handle some or all aspects of agent management. This allows the provider to focus on its core business and accelerate the specialized task of growing the agent network. The ANM can be a dedicated unit in-house but more often is a third party. Most ANMs will help with one or more of the following functions:Getting agents started - If agent recruitment is centralized at the provider’s headquarters, it is difficult to get the right agents in the right locations throughout the country. Using ANMs—especially those that are already located throughout the country—enables the service to be localized quickly.Managing Agents - In almost every service, ANMs play a key role in managing agent operations. Their most important role is usually helping agents rebalance their cash and float. Training and monitoring is an additional aspect of managing agent operations. Most providers prefer to use training and monitoring specialists who are objective (as opposed to ANMs who get a cut of commissions and may not wish to raise red flags on their own agents). Contribution to overall strategy - Some ANMs play an influential role in determining business strategy of the overall branchless banking service and making decisions in areas such as developing products, setting commissions, and adapting processes to ensure the business case is viable.
MAIN MESSAGE: M-PESA is an interesting example of how you can ‘mix and match’ the roles of ANMs. It uses 3 types of entities to help in various aspects of agent management.DETAILS: 1) M-PESA itself has 10 Area Sales Managers which play an overall role in agent management. M-PESA itself is very much the driver of the branchless banking service but uses different kinds of ANMs to help in concrete aspects of agent management.2) Top Image and other similar firms play an important role in selecting agents, training them and monitoring them regularly. Each M-PESA agent is visited at least once every two weeks. It is important that Top Image is paid a flat fee – they are not directly linked to the success or failure of any individual agent and hence can be more objective in their monitoring.3) “Superagents” are banks that have agreed to operate a special facility for agents to rebalance their cash and e-float. This takes place in existing bank branches. There are 6 participating banks and M-PESA agents can go to the branches of any of these banks to deposit or withdraw cash.4) What M-PESA calls “aggregators” are individuals or small companies that own or manage networks of agents (ranging from just a few agents to several hundred). The aggregator may “own” some of the shops (i.e., have their own employee in the location and rent or own the property directly) in addition to “aggregating” independent merchants (i.e., provide them with liquidity management services and oversee their compliance with Safaricom standards).
MAIN MESSAGE: Many branchless banking services are struggling to meet a basic requirement of generating enough revenue to share with partners in the supply chain. The potential causes are multiple, but the key point for this training is that inadequate revenue leads to unhappy partners which in turn makes it considerably more difficult, if not impossible, to build an agent network which is large land adheres to service standards.DETAIL:Branchless banking services must generate sufficient revenue to support the business models of all of the companies involved in delivering the service, the service providers themselves as well as ANMs, agents, and other parties (e.g., partner banks). Yet many BB services are struggling to meet this requirement: not enough consumers are transacting actively enough to yield adequate revenue. The agent network itself may be partially at fault for consumers’ low uptake. Agents may not keep adequate liquidity, or simply may not be willing to serve branchless banking customers. But more often CGAP has seen 4 other causes: (1) poor execution of basic tasks, such as failing to establish a stable transaction platform on the back end, (2) overly cumbersome account sign-up processes (typically stemming from KYC standards), (3) inadequate marketing spend leading to low awareness of the service, or (4) poorly chosen product, by which we mean the value offered to customers does not resonate strongly with an adequately large segment or segments. Many services go to market with a combination of “send money home” (domestic remittance) paired with airtime top-up and several initial bill payment options. In effect, a service which helps consumers deal with the pains of sending money over distance.On the following slides we will show evidence of how most services are not generating adequate revenue yet, and then recommend 2 options for providers.
MAIN MESSAGE: Starving agents and ANMs can trigger a downward spiral or prevent a service from ever getting off the ground in the beginning. It is important to provide adequate incentives to supply chain partners in the form of commissions for account opening and cash-handling. DETAIL:It is not uncommon for branchless banking services to see lower-than-expected uptake by clients, especially due to the unreasonable expectations set by M-PESA’s success in Kenya. This may in turn lead to a provider missing their revenue targets. Managers may be tempted to slash costs to stem short-term losses and hit profit goals. The choice of places to cut can be limited: technology costs may already be incurred or ongoing payments are set by contracts with vendors; providers are often reluctant to skimp on marketing; and it is not always easy to quickly slash staff. One of the common places providers turn to in order to cut costs is reducing commissions paid to supply chain partners for transaction processing and account opening. But if cut too far, agents and ANMs may simply decide the business case is not longer positive for them. If enough supply chain partners exit rapidly, before they can be replaced, consumers may in turn find it hard to locate agents (or agents may turn away all but the most lucrative transactions – e.g. account sign-up, or largest cash-in/out). The result can be a downward spiral which picks up momentum, with quickly declining customer usage, further weakening of revenues, and calls to close the service altogether (or a provider being presented with a fait accompli by its supply chain partners, if they exit en masse). To avoid this cycle, providers must be prepared to absorb some losses between revenue as customer uptake grows to acceptable levels, and the expense of keeping supply chain partners motivated in the meantime.
MAIN MESSAGE: Providers have three options to structure an agent network. Although many services will end up with a hybrid of one or more of these structures, most will start with one predominant approach. DETAILS: Use existing retail chains. The provider enters into an agreement with a firm that owns and operates several retail locations. This may be a chain of grocery stores or petrol stations, but it can also be other chains with many outlets, such as the post office or microfinance institutions (MFIs). The ANM is the headquarters of the retail partner while the outlets act as agents. Typically, the headquarters is already dealing with issues of cash management and quality control in monitoring outlets for its existing products. Examples of this approach include Bradesco’s use of Pão de Açucar (a supermarket).Build a network from scratch from individual stores. In this approach, providers build a network of agents one by one, usually with support from one or more ANMs. The agents are independent and unaffiliated. Some ANMs end up owning some of the outlets. For example, many M-PESA aggregators manage some outlets as well as own several others. This model of building a network from scratch is used by FINO in India, WING in Cambodia and M-PESA. Leverage a wholesale distribution system. Every country has established distribution systems for selling consumer goods. Most prepaid airtime is not sold through MNO-owned and -operated retail stores, but through independent retailers found everywhere in the country. Its distributors (and distributors for many other products, such as soap and cooking oil) have relationships with many retailers who sell a range of products. These distributors can act as ANMs managing retailers (who are agents) in their network.
MAIN MESSAGES: Each of the 3 network structures will bring different elements of operational readiness, reach and control. Using retail chains will bring the highest level of operational readiness while building networks from scratch and leveraging existing distribution systems will both bring high reach but with different trade-offs on readiness and control.DETAILS: We’ve already gone through using retail chains. Both leverage distribution systems and building network from scratch can bring high reach as small, independent merchants can be found everywhere. However, it may take a lot longer to achieve the reach, especially when building from scratch. For these two, the trade-offs lie along the other dimensions. Building a network from scratch will bring highest control of the 3 while leveraging existing distribution system brings a compromise of all 3.Which is right for you? Depends on the market, internal resources of the provider and the products. For example, if other competitors are joining the market and speed is essential, providers may want to start with using a retail chain. If time pressure is not as intense may want to take a slower route to building an agent network from scratch over which they will have ultimately more control.You don’t need to pick one and then stick with it forever. In fact, the best agent networks are flexible and will end up with a hybrid. We’ll do a case study later that looks at this.
MAIN MESSAGE: Providers and agent managers need to develop tools to select, pay and monitor agents as well as manage liquidity and reduce the impact of theft, fraud and abuse.
Manual de Entrenamiento: Construyendo Redes Viables de CNBs 2011
CONSTRUYENDO REDES VIABLES DECORRESPONSALES NO BANCARIOSToolkit para Corresponsales de CGAP 2011 Traducción libre al español del Proyecto de Políticas Públicas de USAID - Colombia
Este material ha sido producido por CGAP, y está basadoen el Kit de Administración de Redes de Corresponsales. “Advancing financial access for the world’s poor” El Programa de Technología de CGAP es financiado por funded by: www.cgap.org/technology El Toolkit para Corresponsales está disponible en: http://www.cgap.org/p/site/c/template.rc/1.9.49831/
Para desarrollar el Toolkit, CGAP analizó corresponsalesen 3 mercados. BRASIL Entrevistas a profundidad con 466 corresponsales INDIA Información Delhi estadística sobre Bihar 16,000 KENYA corresponsales Karnataka Entrevistas con 24 oferentes y gestores de red
Es útil dibujar una curva de riesgo/rentabilidad para corresponsales,definida inicialmente por los costos directos y la remuneración delcorresponsal. x No participarían COSTOS DIRECTOS Participarían 0 0 x REMUNERACIÓN DIRECTA
El caso de negocio del corresponsal es un rompecabezas con mútltiples facetas. Entenderlo y monitorear su evolución requiere de una entidad dedicada a ello. Robo COSTOS Confiabilidad del sistema EXOGENOS x No Participarían Segmentación Costo de la demanda de Alianza con capital la marcaPersonal y COSTOS BENEFICIOSespacio DIRECTOS Costos del EXOGENOS físico crecimiento Más Manejo de la clientes liquidez Mínimo requerido Participarían para empezar 0 0 x REMUNERACIÓN DIRECTA
La mayoría de los proveedores usan uno o más gestoresde red de corresponsales Identificar los Manejo de las Contribución a la corresponsales y operaciondes del estrategia global ayudarles a empezar corresponsal Selección de los Influencia en la corresponsales definición de Visitas periódicas precios & diseño de monitoreo del producto Capacitación de los corresponsales Apoyo en el manejo de la liquidez y el Enlace con los “rebalanceo” de la clientes clave misma para mercadeo y otras actividades
Cómo utiliza M-PESA los gestores de red de corresponsales? • Desarrolla criterios de elegibilidad y administra el proceso de reclutamiento • Gerentes del Area de Ventas realizan monitoreo directo. • Administra el call center para corresponsales • Define todos los aspectos de la estrategia de negocio M-PESA Bancos Super Top Image Agregadores Compensadores • Selecciona los • Identifica candidatos candidatos potenciales • Capacita • Participación variable en • Monitoreo quincenal • Aplicación especial para “rebalanceo” monitoreo y “rebalanceo” • Influyen en decisiones de negocio como los precios y la elegibilidad.
Concepto básico de la oferta: todo el mundo felizIngresos deben ser Sin embargo muchossuficientes para todos los sufren para cumplir esteintegrantes de la cadena: requisito:- Oferente - El gestor de red mismo- Gestor de red - Plataforma de transacciones- Corresponsal inestable- Otros (p.e. bancos socios) - Proceso de apertura complicado - Poca inversión en mercadeo - Selección inadecuada de productos
Oferentes con ingresos restringidos pueden estartentados a presionar toda la cadena. Por lo general estees un error. Poca aceptación por parte de los clientes Clientes no Ingresos encuentran puntos restringidos de transacción. Corresponsales y Oferente reduce gestores de red las comisiones insatisfechos
3 estructuras posibles para crear redes decorresponsales 1. Cadenas minoristas existentes 2. Construcción de redes desde cero 3. Apoyo en sistemas de distribución existentes.
Cada oferente debe encontrar una estructura quesatisfaga las necesidades de hoy y del largo plazo. Disponibilidad Disponibilidad Operacional Operacional Use Cadenas Minoristas Apalanque sobre Sist. Distribucion Cree la Red desde Cero Control Alcance
6 áreas críticas en la administración de corresponsales 1. Selección de corresponsales 2. Inicio de las operaciones del corresponsal 3. Pago a los corresponsales 4. Manejo de la liquidez 5. Administración y monitoreo permanente 6. Reducción del impacto del robo, el fraude y el abuso.
Lecciones claves1. El caso de negocio de los corresponsales puede ser visto como una curva de riesgo/rentabilidad determinada por (1) los costos directos y la remuneración del corresponsal, (2) factores exógenos y (3) motivaciones que afectan en ciertos momentos del tiempo.2. Los factores más críticos tienden a cambiar con el tiempo. Los oferentes deben actualizar permanentemente su conocimiento, lo cual es una razón por la cual un gestor de red dedicado resulta valioso.3. La mayoría de los oferentes van a necesitar un gestor de red dedicado – ya sea dentro de la entidad o un tercero – para ayudar a identificar y administrar los corresponsales. Algunos gestores de red también contribuyen en la estrategia de negocio.4. La implementación debe generar – y compartir- suficientes ingresos para todas las compañías que participen en la cadena de suministro.
Lecciones claves5. Las redes de corresponsales pueden construirse a partir de (1) grandes cadenas minoristas, (2) almacenes individuales y no afiliados, o (3) cadenas de distribución.6. Cada una de estas 3 estructuras ofrece ventajas y desventajas en términos de (1) capacidad operativa, (2) alcance, y (3) control. Es común que los oferentes utilicen una combinación para lograr una configuración óptima de red.7. Los oferentes y los gestores de red deben desarrollar herramientas y estrategias para seleccionar, capacitar y monitorear los corresponsales. También deben desarrollar sistemas de manejo de la liquidez y reducir el impacto del robo, el fraude y el abuso.
Advancing financial access for the world’s poor www.cgap.org www.microfinancegateway.org