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Drivers of agent activity: Reactivating them in rural Kenya

Drivers of agent activity: Reactivating them in rural Kenya

BRUSSELS, 19 May 2016 – ​A new research paper published by WSBI concludes that the agent banking  model is only as good as the quality of accounts opened, the relationship management structures in place, and quality assurance framework.

Authored by WSBI expert Mbinya Mutiso and WSBI's Weselina Angelow, the paper shows that cost-effective agent banking can serve poor Kenyans by better harnessing the model, which is based on a close-contact approach beyond traditional brick-and-mortar branch banks, such as telecom companies and other providers.

The findings of the paper, called Drivers of Agent Activity: Reactivating agents in rural Kenya, are manifold. First, they conclude that a more impactful agent model must meet a variety of needs for the agents to stay invested. Maintaining account and agent activity helps create more sustainable agent networks. The paper tries to understand agent dormancy and inactivity, an industry-wide problem when dealing with poor clients, who are often a challenge to retain.

​By better understanding how many of the reported agents remain active, semi-active or dormant as well as what might be reasons for inactivity, the authors identify bank-agency relationship management anchoring higher retention, showing what matters from a strategic, management and operational point of view when working with agents within a bank-led partnership model. A case study included in the study sheds valuable light on KPOSB's journey in grasping why agents go dormant and what needs to be done to reactivate them.

About the study

Completed within the framework of the WSBI program "Working with savings banks in order to double the number of savings accounts in the hands of the poor",  this specific study is important because it shares lessons learned during the program run. Both qualitative and quantitative research was conducted in partnership with Kenya Post Office Savings Bank.

​Why agent banking is important

According to another study by the Bill & Melinda Gates Foundation, high costs inherent in these traditional banking methods is a main barrier to providing basic banking to poor people through branches and other bank-based delivery channels. Serving poor customers, who often carry small balances and call on banks for small transactions, is a losing game for banks, if costs are outpacing revenue streams. Proximity matters hugely, as customers far from branch locations are less likely to use the service. Back in 2013, WSBI conducted a proximity study to understand the relational factors of proximity and access. Another study commissioned by WSBI in 2012 assesses the limits proximity puts to sustainability, also for agent networks. Well-designed agent banking tries to address these challenges.


>> Read the paper

>> Go to WSBI Doubling Savings Account site

>> Report: WSBI's journey in smaking small-scale savings work (.pdf)

>> See WSBIs commitment to Universal Financial Access (UFA) 2020​​

Financial inclusion; Doubling savings accounts