The maiden ReFinD Webinar Series on Agent Network Development drew over a hundred participants spanning the agent network and financial inclusion value chains in Africa, Asia, Europe, and America, facilitating the exchange of global perspectives on competition and agent network development in LMICs. The event featured two competition-themed ReFinD projects, an expert panel discussion, and open discussions, making for an in-depth and enriching engagement with the with the topic. " The ReFinD Webinar Series is a platform to disseminate emerging evidence and recommendations from ReFinD-funded projects to foster research-industry-policy engagements,” Prof. Peter Quartey, the Executive Director of ReFinD and Director of ISSER said in his opening remarks.
Insightful findings of grantees set the stage
Presentations by two ReFinD grantees working on the theme of competition set the tone for the panel discussion. Prof. Apoorv Gupta of Dartmouth College presented his team’s work on “Understanding Price Transparency in Markets” which focuses on mobile money agents in Atiwa in the Eastern Region of Ghana. The highlights of the presentation include the finding that though lack of transparency is a key feature of DFS agents, competition in the market ultimately drives transparency in pricing. Also, within the context of the village economy, agents may be concerned about negative reviews from customers, hence they would consider relations when it comes to pricing their services. When reputation was used as a mechanism, overpricing decreased by nearly 80%, underlining the significant impact of reputation on agent transparency in rural communities.
Prof. Gianmarco Leon-Ciliotta from the Universitat Pompeu Fabra, Barcelona, Spain, delivered a presentation on the Indonesia-based project, titled, “Competition in the Branchless Banking Agent Market: Effects, Strategic Responses, and the Role of Trust and Fairness”. Findings from the research revealed that while clients deem transparency as important, most agents do not, thereby creating a contrast between client expectations and agent expectations. They also noted that an expected increase in competition will prompt agents to adopt strategies focused on marketing and transparency.
A rich panel discussion
The panel discussion was on the theme "Managing for Impact: Lessons in Managing Competition in Agent Network Development across LMICs." It was moderated by Hugo Pacheco, Papersoft’s Chief Product and Growth Officer and involved representatives from academia, and the regulation and industry sectors (a MoMo provider and a super-agent), an expert panel who brought a wealth of experience and unique perspectives to the theme.
Key take-ways: Perspective from academia
Professor Peter Quartey emphasized the significance of collaborative efforts among policymakers, industry players, and academia in cultivating a competitive and healthy marketplace that is evidence-led. He noted that regulators and industry players need to engage academia to develop the required evidence to inform policies related to competition. This, he stressed, will ensure that the outcomes of interventions in competition within the agent network ecosystem are mutually beneficial for market conduct, and business cases while safeguarding financial inclusion. He encouraged policymakers and commercial players to make use of available data emerging insights and lessons on competition in agent network development from peer markets when designing interventions around competition, citing examples from markets such as Tanzania and Bangladesh. Finally, he underscored the need to “tailor evidence from peer markets into strategies that reflect and suit the unique circumstances of their markets, recognizing that a one-size-fits-all approach may not be universally applicable.”
Perspectives from a mobile money provider
Major General Sheik Md Munirul Islam, Chief External and Corporate Affairs Officer of bKash, shared insights into the company's growth journey to market dominance in Bangladesh. He revealed that this has been influenced by strategies such as a non-exclusive agent network, strategic geographic selection, and a focus on empowering and incentivizing its agents. “Today we have 340,000 agents under 300 distribution houses, a ratio that we maintain depending on the number of customers in a particular area and the number of agents required,” he explained.
General Islam shared that bKash has stayed ahead of the competition by focusing primarily on the customer and developing customer-centric products and services through their extensive agent network. He however maintained that establishing agent network across Bangladesh has not been without a few hurdles. “The main challenge we encountered was the need to extend our services to remote and inaccessible areas of Bangladesh and the challenge of internet connectivity in such areas”. He highlighted the role of the Unstructured Supplementary Service Data (USSD) feature in addressing their challenge, further deepening their competition within the market.
Perspectives from a regulator
Using Tanzania as a case study, Mr. Mutashobya Alex Mushumbusi, the Assistant Manager of the Retail Payment System of the Bank of Tanzania, highlighted how non-exclusivity regulatory mandates have facilitated the entry of new players, thereby promoting competition, innovation, and expansion of services, especially across rural areas. He stated that, “the ultimate goal is to provide consumers with choices, empowering them to select services that best meet their needs while encouraging providers to tailor their services to community-specific requirements.”
Mr. Mushumbusi added that far from promoting war prices, increased competition has been rewarding since it incentivizes agents. Competitive pricing from multiple providers has allowed agents to raise their performance, resulting in improved service delivery. He noted that through healthy competition, and market expansion, financial inclusion is reaching new heights.
Perspectives from a super-agent
Winta Yohannes, Founder and Managing Partner at Axiom Ventures Investment PLC - a super-agent for Safaricom’s Mpesa mobile money in Ethiopia shared insights into managing competition as a new entrant in a market dominated by traditional bank agents. She touched on the dynamics of navigating the dominance of the government-owned mobile network operator (MNO) which boasts a 90% share of transactions, including government payments and bill settlements. She also spoke about the absence of transaction fees within the agent network ecosystem and it’s the income generation challenge this poses for agents. To address this, she said “Mpesa has initiated partnerships with banks with an aim to channel various transactions, such as bank openings and mortgage products, through the agent network, creating additional use cases which can attract transaction charges while waiting for possible regulatory intervention to facilitate competition. “
Ms.Yohannes discussed the initial reluctance of individuals to become agents due to a lack of understanding of the benefits. However, they are addressing this through training, branding, and language customization. Finally, she highlighted Mpesa's first-mover advantage in Ethiopia, including 5,000 agents, out of the 22,000 agents in Ethiopia, and the super-agent's focus on building a quality agent network in key locations, such as bus stops and university campuses.
The maiden ReFinD Webinar Series on Agent Network Development ended with a call for increased transparency within the agent network community. The event united professionals from diverse sectors, including people from financial institutions, government agencies, academia, research institutions, Small and Medium Enterprises (SMEs), and Mobile Network Operators (MNOs), facilitating an enriching exchange of insights and learning on competition and agent network development in LMICs. It was held on November 9, 2023.