
The lack of infrastructures remains the major factor for the isolation of rural populations in several regions of the world. The distance that separates rural areas from urban centers becomes a constraint for companies. The costs for expanding the branch network to these areas are so high that the only alternative is Agents.
In this context, Agent Networks have played a fundamental role in the approach and inclusion of rural communities. That said, Agent Networks are not only important for Financial Service Providers (FSP) but strategic.
In countries where the majority of the population is poor and lives in rural areas, Agents represent a strong foundation in social development. They act as convenient points in isolated communities. Agents provide awareness, education, support, enable access to essential services and products, and promote Financial Inclusion, leveraging their trust and entrepreneurship in the community.
This blogpost is based on the study developed by CGAP and shows how the evolution of the agent networks has been specifically crucial for FSP and generally for the financial systems of emerging markets.
The Starting Point: Cash-in & Cash-out
Most transactions in emerging markets are made with cash. In these regions, cash-in and cash-out (CICO) networks mark the first move in the transition to the Digital Economy.
Cash-in/cash-out is a service that allows customers to convert cash into digital money (or e-money) and digital money into cash. CICO networks are especially important for domestic remittances, money transfers from urban centers to rural areas, to be more precise.
Part of the rural population that migrated to cities, searching for better living conditions, used CICO networks to send money to their families. This service facilitated the entire money transfer process and made it more secure. In the villages, the relatives used to dealing with cash just needed to go to an Agent and do the “cash-out”. The mere access to this service is revolutionary for most isolated regions because it is a gateway to Digital Financial Services (DFS), thus promoting Financial Inclusion.
However, developing countries have a large poor population with very low digital and financial literacy levels.
Therefore, agents act like educators when presenting these digital services where people have little or no contact with technology. Agents create informal bonds with locals and build trusting relationships in these communities. Agents end up explaining the benefits of the services and assisting the practical usage of DFSs.
CICO networks expanded with the increase of consumer confidence. The growth allowed them to explore other needs among customers, and the diversification of services came as a natural step.
The Diversification of Services
Cash-in/cash-out was the key for millions of people to have access to Digital Financial Services. The demand for other digital services was high and Agent Networks as entrepreneurs easily catch these growth opportunities. Besides that, there’s the huge perk of generating reserve amounts to help with the liquidity for CICO.
The offer now includes services such as digital credit, bill payments, top-ups, and merchant payments. And the more services turned available, the more attractive it became to work in Networks: more services means more sources of revenue. In these networks, the entrepreneurship mentality prevails, because usually, Agents don’t have labor links with the networks and the work is commission-based. Thus, many young people see this job as an opportunity to start their own business.
The diversification of services continuously intensified thanks to advances in mobile technologies. In the case of Banking & Finance, currently, the best agency banking systems allow to sell and deliver all services available at a branch.
(See how the banking software Waynbo for Agents allows you to integrate new services and grow your business here >)
However, it was not technology alone that enabled such a high diversification of financial services in Agent Networks. The Government and public entities have decision-making power in heavily regulated sectors as the Financial sector.
Government Incentives for Agent Networks’ Expansion
First of all, regulators in the financial sector must implement directives for nonfinancial services to operate. In many African countries, Agent Networks are owned by or linked to Mobile Network Operators (MNO). These Telecommunications companies were pioneers in the CICO service through Mobile Money operations.
Then there’s the structural problem to solve.
In certain countries, such as India or Colombia, the Government promotes the expansion of Agent Networks. In these cases, governments themselves use the networks to facilitate transfers from the State to citizens (G2P).

Governments invest in rural financial infrastructures as a means to achieve Financial Inclusion. Investments are allocated to the construction of branches and interoperable payment systems. Systems interoperability creates a technological structure that connects public banks, private banks, and 3rd party services from partners, further stimulating the diversification of services in agents. This means that a single Agent can offer multiple financial and nonfinancial services from different providers.
This is precisely what happened with the eCommerce distribution networks in China, which took advantage of their capacity to reach distant small villages to meet the demand for financial services in rural areas.
eCommerce Agent Networks
China is the case that best illustrates the use of eCommerce Agents to deliver financial services. The Agent Networks by Chinese eCommerce companies had a wide outreach into rural areas, so they took a chance to sell financial services and generate more sources of revenue.
Here too, the CICO service is essential to the success of eCommerce networks. Given that people in rural areas are more used to cash, the ability to convert it into digital money helps increase eCommerce users and customers.
It is important to point out the weight of technological innovations in the capacity and quality of last-mile delivery of digital services via Agents.
Mobile agent solutions are featuring more and more innovative capabilities. A good example is the curious inversion of the type of network in adapting the offer. Contrary to what happened in China, in which eCommerce networks entered the financial space, currently, we see Mobile Money Agent Networks or Banking Agents that became eCommerce access points. This is possible thanks to innovative Agent Networks software, like the Waynbo platform. The Waynbo mobile version for Agents is a Super App, which is prepared with a marketplace to expand the service mix offered.
A Channel for FSP, a Bridge for Inclusion

As we saw, the importance of Agent Networks goes far beyond the distribution potential for Financial Services Providers.
Agent Networks help to fight the isolation of populations located in distant areas where there are still millions of unbanked and underbanked people.
Besides, they work as connection structures between the Government and the citizens, in other words, they are direct routes that ensure greater speed and security in services and assistance by the State, like payments of social subsidies or pensions.
In conclusion, companies in developing countries benefit in different ways from the activity of Agents. They enable access to services that are essential to improve quality of life and also promote Financial Inclusion and Economy growth. On the other hand, Financial Services Providers exponentially increase their customer base and access points.
Finally, there is a gradual transition towards fully digital financial systems, more secure and compatible with the opportunities of the Digital Economy. And that sounds good for FSPs to scale their capacity.
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Hugo is the Chief Product Officer at Waynbo. He has an extended experience in Identity solutions and its usage on banking and alternative delivery channels in Africa. He is a traveling addicted, so if you need suggestions for holidays, ask him.