Branchless Banking Agents in Brazil: Building Viable Networks

This presentation examines the widespread use of banking correspondents or agents in Brazil, presents a business case for small agents and offers insights on network management.

Brazil has seen more than a decade of regulatory changes to expand use of agents by banks, and there are nearly 150,000 agents operating in the country. Findings from a CGAP-FGV-Planet Research study indicate that:

• Sao Paulo has the highest volume of transactions;
• Rural areas have the lowest volumes, but the highest profits per day;
• Rural agents do more deposits and withdrawals, while bill payments dominate the urban agents’ business;
• Downtime on the system impacts profits significantly;
• Agents face challenges in terms of low remuneration and liquidity management.

  The presentation focuses on success factors of Banco Postal, which has 5,950 outlets in Brazil and 91 outlets in Amazonia. Banco Postal enjoys significant negotiating power, tremendous brand recognition and loyalty among clients. The study finds that Banco Postal is profitable as it has large volume of transactions which attract high commissions.