Alternative delivery channels and impacts: agent banking

By bringing the point of service closer to the client, both literally in terms of physical distance, but also in terms of social proximity, agent networks have improved the provision of micro-banking services in terms of client convenience and lower costs. Evidence from multiple studies shows that clients conduct more financial transactions when agents are available, especially deposits, withdrawals, and transfers of funds. Greater perceived security of transactions and balances and more trust in agents than other providers are likely contributing to these patterns, though the evidence base is not yet well established. There are also emerging indications that transacting with agents deepens clients’ experience with financial services and thus improves their financial capabilities. From the providers’ side, agent networks can reduce costs and expand service delivery, though agents often have lower levels of training and accountability than branch staff, raising concerns about service quality. Lack of competition and pricing transparency are related concerns, which disproportionately affect clients in poor rural areas and those with less experience with financial services, especially women.