Assessing Agent Profitability: MicroSave's Agent Journal Studies

MicroSave's Policy Brief No. 6 presents findings from a series of studies conducted by MicroSave in 2011 to assess the profitability of business correspondent (BC) agents. The brief highlights the importance of agents' profitability, identifies its drivers, and provides suggestions to increase profitability. The study used a methodology called agent journals in order to overcome data gaps and assess the real profitability of agents. The brief states that agents' profitability is the foundation of a successful agent network. It determines agents' loyalty to the agent network manager (ANM) and motivates agents to provide better customer service and increase business. Conclusions include:

• Factors that affect agent profitability include location, marketing support provided to agents by the ANM and the bank, and quality of backend support;
• High transaction volumes enable remittance focussed agents to reach the breakeven level;
• Low transaction volumes prevent No Frills Account (NFA) focussed agents from reaching breakeven;
• Improving the value proposition by increasing the range of products to include a larger variety of banking products could help NFA focussed agents improve transaction volumes.