Alternative Delivery Channels and Impacts : Agent Banking

This paper reviews evidence on agent networks of microfinance institutions and other financialservices providers, which have expanded rapidly in recent years in some low- and middle-income contexts. There isemerging evidence that clients become more financially active as a result of the convenience and security oftransacting with agents, especially with respect to depositing, withdrawing, and transferring funds. Agentnetworks could also help increase the savings of low-income clients, although evidence suggests that commitment devicesmay also be required, and there is little evidence that agents expand credit to clients, although they canfacilitate loan repayment. Building on their physical and social proximity to customers, agents can become a potentialgateway for expanding and deepening financial inclusion, but the pricing of agent transactions and consumer protectionremain important considerations.