State of Business Correspondent Industry in India –– The Supply Side Story

This paper examines the supply side dynamics of electronic/mobile banking in India. It is based on a survey conducted by MicroSave in March 2012 with eleven leading business correspondent network managers (BCNMs) in the country. The survey gathered information on a variety of outreach, transaction, and activity metrics. It also had a questionnaire about qualitative aspects of BC operations. The survey found that significant numbers of BCNMs are optimistic and believe that the sector is promising and has immense potential, despite its challenges. The research showed that agent banking can offer banks important cost reductions, but for banks to realize this and pass on the benefit, BCNMs need to achieve a critical mass of customers. Findings include:

• Building customer base should happen simultaneously with building a strong agent network;
• Regulatory support to the sector has increased as has support from banks;
• Entities like the National Payment Corporation of India and Unique Identification Authority of India are important enablers for sector growth;
• BCNMs, and banks should continue to leverage the BC model to deliver impact and value to consumers, while ensuring symbiotic market-led growth for participants.