Agent banking study - Oct 2011

The EFInA Access to Financial Services in Nigeria 2010 survey revealed that only 30% of the adult population has a bank account. From the demand side, one of the key barriers to access finance is the distance to the bank. On the supply side, one of the key constraints is the sheer costs of building and maintaining branch networks in order to reach the low income population, especially those in rural areas. 

To achieve universal access, banks will need to adopt their systems to a low-value, high-volume transactional environment and build more flexible, scalable points of services, where people can conveniently pay into or cash out from their transactional accounts.

Technology can enable banks and their customers to interact remotely in a trusted way through existing local retail outlets. Customers can be issued bank cards with appropriate PIN based or biometric security features and the local store – the “banking agent” – can be equipped with a point-of-sale (POS) device controlled by and connected to the bank using a phone line or wireless/satellite technology. Infrastructure requirements can be further reduced by using mobile phones to hold “virtual wallets” and as a POS device at the store. Typically, agents benefit from additional revenue from commissions generated from customer transactions and increased footfall in their outlets.

Currently, there are no agent banking regulations in Nigeria. Therefore, in order to make recommendations to the Central Bank on the key elements that should be adopted in the regulatory framework for agent banking in Nigeria, EFInA undertook a desk study that evaluated agent banking models in Columbia, Brazil, Peru, Kenya and India. The study also assessed the impact of agent banking on promoting financial inclusion in these countries and provided suggestions on the most effective way to develop an agent banking network in Nigeria. 


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Agent banking study - evaluation of agent banking models in different countries