New publication on critical factors to create successful mobile money agents in rural areas

This blog is co-written by Lara Gilman and Janet Shulist. 

Although mobile money services have extended further into rural areas than more traditional financial services have been able to in the past, rural customers still remain an underserved segment. A key barrier to reaching these customers is operational. Creating, managing and sustaining an agent network in rural areas remains an industry blind spot.

To address this supply-side challenge, today we are releasing a new publication, conducted in partnership with Altai Consulting, on the supply of mobile money in two predominantly rural markets: Mali and Chad. The starting point was simple: by understanding how successful rural agents operate, the industry can also begin to understand how providers can adapt their operational strategies to serve more remote locations and identify the ones to focus on first.

Although this research did not uncover a silver bullet to mobile money growth in rural areas, it did reveal “green shoots” of opportunity. In both Mali and Chad, there are successful agents operating deep in the frontier without access to either formal financial services or core physical infrastructure like electricity, transportation, and roads. By analysing these green shoots, this research aimed to reveal what contributes to success and how this can help providers to better serve rural customers.  The report outlines four key findings that can provide operators insight on how to adapt their operational strategy to extend reach, including:

  1. Local context matters, and data can help to prioritise areas for growth
  1. Focus investment on fewer and more specific rural profiles
  1. Effective master agents can bridge the liquidity gap
  1. Evaluate the role of operator collaboration in the rural context

Further, the Appendix also offers a full description of how to build user-friendly and actionable geo-based go-to-market tools, including technical notes and implementation details. Analysing both telco call detail records (CDR) data and mobile money transactional data against key macro-economic attributes can help operators to visually pinpoint regions with higher transactional potential. Using these data sets, operators can build an efficient go-to-market tool to guide their rural expansion.

Download: Publication | Overview Presentation

Photo: Courtesy of Maxime de Lisle, Altai Consulting.

Join the Conversation (2 comments)

  • Thank you for this interesting publication, which focuses very well on the best practices to effectively address rural areas. I, however, have a few comments that I submit below:

    ==> Rural Area: the criteria of 5~10 km radius could include suburbs area as well. for me, if you only wanted to keep a distance-based criteria, it should be at least 30~50 km

    ==> Why didn’t you take into consideration agent profitability? Consider cash in/cash out value only, is not too much relevant for me. If you have 2 different agents, one performing well in cash in, and the other performing well in cash out: at the same transaction value, the both will have different profitability. so for me, the definition of “successful agent” should include basic profitability criteria (like over 10% of investment, for example)

    ==> Area to prioritize: For me it’s not only about prioritization; the triumvirate mainly helps to define an appropriate strategy based on regional context. for small countries in terms of size (vs big ones like Mali and Chad), the triumvirate will help to adapt the overall strategy to regional specificities, but the main objective will be to have a good footprint over the country.

    By the way, the study remains relevant and helpful for MNO which are struggling to roll out an effective footprint extension plan in rural area

  • Dominique, many thanks for your comment. Here are a few responses to your feedback. It would be great to continue this conversation with you as well, so please let us know how we can best support you in-country.

    Rural areas: It’s a great point and one we debated. This distance was tailored for the markets we were researching. I would agree that 5-10km would not be suitable in all markets because it could encompass suburbs or “peri-urban” locations. For Mali, we were able to layer an additional component around “levels of isolation” which was calculated according to distance from a main road. The levels of isolation measurement was also able to reinforce the 5-10km radius as an appropriate indicator.

    Profitability: Another great point – and profitability was in the original scope of work. However, because of the complexity around calculating input costs & revenues derived from other business, it was challenging to delineate between business profitability and the contribution MM made to the business. It is an area where we hope to analyse further and it would be great to get your perspective on how to tackle this complicated issue.

    Areas to prioritize: Agreed. Prioritisation is only the first step and is more effective when it’s aligned to a larger strategic approach to extend into rural areas.

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