201508_.workshop dfs-kigali_simon priollaud_vf

CONFIDENTIAL AND PROPRIETARY
Any use of this material without specific permission of Access to Finance Rwanda is strictly
prohibited

1
Following an assessment mission conducted for Access to Finance Rwanda, PlaNet Finance has developed a detailed analysis
of the Rwandan ecosystem for Agent Banking and identified key Best Practices and recommendations.
Context of the project
Methodological approach
Beyond an individual assessment – what are the lessons at the country level ?
• Access to Finance Rwanda (AFR) is a Rwandan investment company established in 2010 by the UK government, the
Ministry of Finance and Economic Planning and the National Bank of Rwanda. It is funded by DFID, KfW and the World Bank.
• The mission of AFR is to promote financial inclusion in Rwanda by building institutional capacity within the financial sector
and by promoting access to financial services
• In April-May 2015, AFR has tasked PlaNet Finance to assess the deployment of an UOB’s agent banking solution by a
Rwandan Microfinance Bank
Mystery Shopping
(50 )
Focus Groups with
agents (4)
Interviews with key
informants (BK,
mVisa, MMC, BNR…)
Desk research
(Finscope, AFI…)
• The goal of these workshop is to go beyond the case study and see what are the lessons and challenges for different
stakeholders that could or have engaged in Agent Banking as a way to pursue of double bottom line of financial inclusion
and profitability.

2
The state of
financial
inclusion in
Rwanda
Challenges
A favourable
ecosystem
for Agent
Banking
Banking sector
Mobile sector
Policy and legal
environment
Analysis of national
and international
initiatives
National initiatives
International initiatives
Detailed assessment UOB
Best practices for
Agent Banking in
Rwanda
This workshop parallels the step-by-step approach that PlaNet Finance has deployed for the case study evaluation to
highlight sector-wide lessons and best practices for Agent Banking in Rwanda.

1. The challenges of financial inclusion and the case for Agent
Banking in Rwanda
2. Case study of UOB
3. Best practices
4. Key challenges and lessons learnt
3

4
The state of financial inclusion in Rwanda has considerably progressed since 2008 but there is still room for improvement,
especially as regards product diversification and rural penetration.
 Financial inclusion has dramatically improved over the past few years :
o The percentage of the population acceding formal financial
services has doubled from 21% to 42% between 2008 and 2012
(14 to 22% for the formally banked population).
o Complete financial exclusion (formal and informal) has dropped
from 52,4% to 28.1%.
Evolution of Financial inclusion in Rwanda (2008 – 2012)* – Source : AFI (2014)
Relative access points density (per
10,000 pop.) – Source : Finclusion
Lab (2014)
Initiatives for financial inclusion in Rwanda are also supporter by
proactive policies such as the FSDP II and a efficient regulatory
environment.

5
Combining this favourable ecosystem to the currently limited state of DFS penetration creates a strong case for the
deployment of new, innovative, and profitable digital financial solutions.
Breakdown of DFS adoption in Rwanda
Growing financial
sector
Consolidating mobile
sector
+
=Booming development of all sorts of Digital Financial Services
Sources: World Bank WDI (2014 unless otherwise stated), CIA World Factbook (2014), RURA (2014), Enclude (2014).

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SWOT Analysis of Agent Banking
Strengths Weaknesses
- Lower CAPEX and OPEX costs
- Improved quality of service – decongestion of branches
- Increased outreach
- Improved targeting of specific customer segments – low-
income, rural, etc.
- Lack of real control of agent behaviour
- Additional operational issues – liquidity management,
AML/CFT, etc.
- Lighter/lower-quality interaction with customers
- Opportunity cost of setting up and managing a network of
agents with specific needs and problems.
- Leverage booming Mobile Money business to increase the
customer base
- Gain a competitive advantage over banks that do not provide
this service
- Product diversification to match needs that brick-and-mortar
branches cannot address.
- Make the most of the policy momentum towards cash-lite or
cash-less economies in most developing countries.
- Bank reputational risk if the service fails
- Inadequate level of support
- Potential lack of customer acceptance and/or readiness to
adopt such services
- Higher prevalence of fraud and degradation of portfolio
quality due to less stringent management.
Opportunity Threats
Given the remaining challenges and the momentum for financial inclusion, Agent Banking could become a very powerful
means for banks and other stakeholders to advance both profitability and social development.
 Definition – Agent Banking allows small businesses
(known as agents or correspondents) to act as banks’
points of services and conduct transactions on
behalf of them.
 Agent Banking offers a wider range of products to
customers than Mobile Money : savings with
interests, loan repayment, insurance, etc.

7
Mobile and Mobile Money market shares (2014)
Number of mobile payment users
 The mobile penetration rate has significantly risen during the last 7 years:
from 10% to 70% for mobile.
 The market is constituted of 3 Mobile Network Operators (MNOs): MTN
(since 1998), Tigo (since 2009) and Airtel (since 2012).
 With 3,8 million active subscribers, MTN retains its dominant position but
is increasingly challenged by Tigo and Airtel who have secured 51% of the
market (respectively 36% and 15%)
 In terms of activity, there is much more of a duopoly between MTN – clear
leader in SMS traffic – and Tigo – slightly dominating its competitor as
regards calls.
 The main regulator for telecommunications is the Rural Utilities Regulation
Authority (RURA) who issues licenses for fixed and mobile operators.
Mobile
Mobile Money
 Each 3 MNOs deploy their own Mobile Money Solution : MTN Mobile
Money is available since February 2010, Tigo Cash since April 2011 and
Airtel Money since July 2013.
 Around 32% of the population subscribes to mobile payment solutions –
600% increase in the number of customers over the past 5 years.
 Annually, it represents almost 80 million transactions and RwF 457 billion
($663 million, 9% of GNP).
 Average transaction of RwF 5,712 ($8,33).
Sources: RURA (2014) NBR (2014) and MNOs’ website

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Number of clients/members (2010 – 2013)
The banking sector is dynamic : it has witnessed a significant increase in terms of customers and creation of financial
institutions
 The NBR differentiates several types of financial institutions in Rwanda : Commercial Banks, Microfinance Banks, Non-bank
microfinance institutions, and Savings and Credit Cooperatives (SACCOs).
 Currently, the banking landscape is composed of 10 commercial banks, 1 cooperative bank, 4 microfinance banks, 12 limited
liability MFIs and a myriad of SACCOs.
 Rapidly evolving sector: 80% of formal financial institutions (mostly U-SACCOs) did not exist 5 years ago, the number of banks
has increased by 50% from 10 to 15 since 2010.
 BK is by far the largest player in terms of total assets but the situation is
different if we take into account loans delivery and/or number of clients.
 Among commercial banks, BPR has by far the most important branch
network and rural penetration.
Commercial Banks – Size and outreach
Microfinance Banks – Size and outreach
 Microfinance banks reach an important segment of the population not
served by traditional commercial banks (14% of all formal borrowers are
clients of one of the 4 MF banks) but only 24 branches outside Kigali.
 The 461 U-SACCOs form the only comprehensive formal financial
network – though each U-SACCO is administratively and operationally
autonomous – in Rwanda. 90% of Rwandans live within a 5km radius of
an U-SACCO.
Sources: NBR (2015) and AFI (2014)

Banking in Rwanda
3. Best practices
9

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• A brief benchmark of domestic and foreign
Agent Banking initiatives was conduced in
order to have some references to compare
with UOB’s agent network.
• 5 initiatives were analyzed: 3 in Rwanda
and 2 in neighboring countries (DRC and
Kenya).
• All deployments were assessed along the
following criteria :
- Product
- Network Management
- Technology
- KYC and processes
- Cost structure
- Marketing
One of these benchmark’s key takeaway is that there is no such thing as a “one size fits all” model for Agent Banking. The
most suitable organization, product mix, network structure and business strategy ultimately heavily depends on the local
and corporate context.
In Rwanda, Agency Banking initiatives are rapidly flourishing and the ecosystem is already quite diversified, however the
recent difficulties with some deployments prove that it is essential to carefully analyze the market and understand the
customers’ needs before rolling out a service.

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 The detailed assessment of Urwego Opportunity Bank’s mHose service was the core of PlaNet Finance’s
mission. We examined six key streams :
 The objective here is not to give case-specific information about a particular Agent Banking but to
present highlights from quantitative/qualitative research and underline must-address points that are
critical to the success or failure of Agent Banking deployments.

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When considering the products and services offered through agent banking, it’s is crucial both to carefully
design the supply chain and monitor & adjust the evolution of uptake among agents and clients.
Key dimensions to take into account
1/ Static product characteristics
 Products & services available at agents, products & services directly available through the
Mobile Banking solution and the complementarity/mix between these two supply streams
 Collateral products and features – side-products that are linked to bigger services or conditional
on certain financial behaviors
 Accessibility
 Fee structure
 KYC process
2/ Dynamic product characteristics
 Number of clients and agents
 Activity rates of agents and clients
Some recommendations to improve a DFS solution
1) “Allow agents to register clients”
2) “Eliminate or market misunderstood/unknown
products”
3) “Foster Higher-value and higher-volume transactions”
4) “Offer 1 free Cash Out per month”

Agent
Products
Products available at UOB
agents
Medium
Component Description Performance
Client
Products
Products available through
the mHose Mobile
Banking solution
High
Additional
products
and features
Collateral products and
services benefiting to
clients and agents
High
Accessibility
Channels through which
the service is available
High
Fee
structure
Fees paid by clients to
transact and use the
service
High
KYC Process
Procedures to register a
client
Medium
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# Clients
Number of clients who
have subscribed to the
service
High
Activity rate
of clients
Activity rate of registered
clients
Medium
# Agents
Number of agents
registered for mHose
High
Activity rate
of Agents
Activity rate of registered
agents
High
Overall quality for this
stream
High

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Ensuring that the business case is sound and strong at both the aggregate and agent levels is key to
maintaining the Agent Banking solution’s sustainability over time.
1/ Macro Business case
 Remuneration
 Positioning
2/ Agent Business case
 Agent’s understanding of the tariffs and
commission structure
 Agent’s satisfaction level
 Agent’s Liquidity management capacities
 Agent’s independence
Some recommendations to improve a DFS Solution
1) “Offer Liquidity Management facilities to
Agents”
2) “Bring more players to the ecosystem”
3) “Allow agents to cross-sell with (future)
partners’ products”
4) “Allow agents to access preferential loans”

Assessment of the second stream “Sustainability of the Business Case”
Remuneration
Structure of the
remuneration by type
of transaction
High
Positioning
Positioning relative to
competitors
High
Agents’
understanding
Understanding of the
commission structure
by the agents
High
Satisfaction
level
Agents’ satisfaction
with their agent
banking
activity/revenues
High
Balance
The agents can balance
cash and float
Medium
Independence
The agent is
independent in for day-
to-day business
Low
15
stream
Medium

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The agent network is the backbone of any Agent Banking model. Ensuring that each phase of the network
development and management is crcucial
Key dimensions to take into account :
 Recruitment of Agents
 Initial training
 Ongoing training
 Agent monitoring
 Rebalancing/liquidity management support
 Ongoing support
1) “Systematically conduct statistical analyses on Agents’ performance”
2) “Create and/or foster partnerships with 3rd party agent network manager”
3) “Make the agent feel special”

Assessment of the third stream “Agent Network”
Recruiting of
agent
Recruitment of agents High
Ongoing
Training of
agents
Training on new topics High
Agent
monitoring
Monitoring of the existing
agents
Medium
Balancing
Support
Support to agents mainly
on liquidities
Medium
Ongoing
Support
Support done to agents
when necessary
High
Initial
Training of
agents
First training High
17
stream
High

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 Above-The-Line Marketing – wide untargeted marketing initiatives
 Below-The-Line Marketing – niche targeted marketing initiatives
 Branding – Strength and visibility of the Agent Banking brand at agent’s outlets
 Other awareness-building and brand-building mechanisms – role of agent-support and customer-
training mechanisms
 Understanding of the products and services – The collateral outcome of a marketing strategy is the
extent to which agents and customers have internalised the service and understood its products.
1) “Fight inactive clients”
2) “Continue and foster BTL initiatives”
3) “Engage in the rebranding of strategic agents’
outlets

UOB has developed a mix of marketing materials to support the customer
4 )
Knowledge
6 ) Regular
use
5 ) Trial
3)
Understanding2) Awareness1 ) Unaware
The client
tries the
service for
the first time
The client
uses it on a
regular basis.
The client
has never
heard of the
service
The client
has heard of
the service
The client
understands
the service
and its value
The client
know how to
use this
service
Source : Adapted from MMU
Branch
Campaigns
Discussion
Training Leaflet
Call Center
Goodies
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Press
Radio

Assessment of the fourth stream “Marketing and awareness”
ATL
Marketing
General marketing
initiatives on mHose
High
BTL
Marketing
Targeted marketing
initiatives on mHose
High
Branding
Strength and visibility of
the mHose and UOB
brands at agent’s
Low
Other
mechanisms
Other ways to
communicate to clients.
High
Understandi
ng of the
products
Degree of comprehension
of the products
Medium
Understandi
ng of the
service
Degree of comprehension
of the service
Medium
20
stream
High

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The extent to which risk is addressed in an Agent Banking framework is a crucial determinant of the
business case sustainability at the aggregate and agent level.
 Knowledge and understanding of risks by agents and clients
 Clients and agents experience with operational risks and fraud
 Monitoring of risk
Some recommendations to improve a DFS solution
1) “Strengthen fraud detection”
2) “Buy a fraud software”
3) “Extend service quality and availability of
customer and agent support services

Assessment of the fifth stream “Risk mitigation”
Understan-
ding of risks
/ Clients
Knowledge of the risk
(fraud…) by the clients
Low
Understan-
ding of risks
/ Agents
Knowledge of the risk
(fraud…) by the agents
Medium
Risk
Reponses /
Clients
Actions of clients when it
occurs
Low
Risk
Reponses /
Agents
Actions of agents when it
occurs
High
Monitoring
of risk
Monitoring of the risk of
fraud by the agent.
Low
22
stream
Low

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Technology considerations may appear too complex to be dealt with at a strategic level, but their
significant impact on the service’s features make them a very important part of the design of an Agent
Banking model.
 Interoperability – possibility or not to access the platform from any mobile phone and SIM
 Ergonomics – Easiness to use the device and the agent banking menu
 Devices used by agents – types and reliability of handsets used by agents
 IT support for agents – frequency and quality Call Centre and/or on-site support in the event of
technical problems
 Quality of the platform – frequency and gravity of breakdowns episodes leading to the unavailability
of the platform
 Network quality – quality of USSD and SMS delivery
Some recommendations to improve a DFS
Solution
1) “Extend partnerships”
2) “Develop SLAs with service providers”
3) “Enhance quality of SMS delivery”

Assessment of the sixth stream “Technology platform performance”
Inter-
operability
Possibility to access the
platform through any
mobile phone
High
Ergonomics
Easiness to use the device
for agent & client
Medium
Device for
agent
Type of handset for the
agent
Medium
IT support
for agent
UOB support to resolve
issues
High
Breakdowns
Unavailability of the
platform
High
Network
quality
Quality of SMS & USSD
delivery
Low
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stream
Medium

Sustainability of the
Business Case
Agent network
Marketing & awareness
Risk mitigation
Technology platform
performance
Products & Services
Low Middle High
Legend
The performance of UOB’s agent network is overall good
25

Banking in Rwanda
3. Best practices
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• Some challenges :
- Increasing outreach and improving customer experience.
- Keeping a minimum level of operational and strategic autonomy.
Creating the conditions for a viable ecosystem beyond the bank’s own agent-banking model is vital both for the business
model sustainability and customer acquisition/retention
27
Best Practices ?
- Tailor-made partnerships – 1) with MNOs for product development (example of M-Kesho which is a successful
partnership between Equity Bank and M-Pesa in Kenya) and increased outreach (recent I&M/MobiKash agency banking
partnership), 2) with other banks for operational convergence (partnership between Banco do Brasil & Lemon Bank) or
3) with Fast-Moving Consumer Goods (FMCG) companies for increased outreach (example of Nueva Walmart de
Mexico’s partnerships with 4 Mexican banks).
- Focus on agent non-exclusivity in rural areas for increased outreach and scale economies regarding agent support,
monitoring and liquidity management.

- Training effectively a large number of agents.
- Being able to deliver continuous training in order to keep a standardized high-quality level of service.
Training is one of the most powerful levers available to drive high-level agent performance
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Best Practices ?
- Training must be comprehensive across topics and personnel : covering multiple aspects of agent banking such as
products and processes, KYC and AML/CFT, technology platform, banking operations, soft skills and communication
(example of FINCA’s multifaceted program in DRC) and involving all people within the agent banking distribution
channel (business owners, handlers, etc.).
- As a very specific sub-component of an agent banking model, it might be relevant to outsource training to a specialized
3rd-party provider (example of Top Image/M-Pesa) but it depends on the relative availability of HR resources.
- Allocate dedicated trainers with clear KPIs for performance management.

• Challenges :
- Find a balance between maximum outreach and targeted awareness (cost-benefit analysis).
- Differentiated marketing strategies to adapt to difference audiences (rural vs. urban, young vs. older, etc.).
- Key difference from mobile money branding : agent banking is intrinsically linked to the core identity of the main bank
brand.
A significant investment in marketing is increasingly seen as a critical component of success for agent banking
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Best Practices ?
- Provide standard starter kits including both merchandising & branding materials before agent activation.
- As agent banking is still a push product, engage in intensive BTL strategies (ex. of EKO with canopies to explain products
outside outlets, and FINCA’s customer training programs) and promote agent’s proactive sales & marketing efforts
(through incentives from commissions and specialized training).
- Support BTL by very wide and aggressive ATL campaigns at the launch of the service to increase general awareness (ex. of
M-Pesa’s and Equity’s full-blown launches), with a simple, single key message.
- Use dedicated tools (both ATL and BTL) for low-end clients : road shows and tents instead of TV and radio.
- Segment the target customers and focus on the “pain points” each group experiences with cash (rurals with opportunity
cost, urbans with security issues) to fine-tune the BTL strategy.

Structural improvements*
Rebalancing mechanisms improvements*
- Selecting agents that handle a large amount of cash (ex.
airtime resellers).
- Requiring a certain initial float requirement and/or upfront
capital based on expected average value and number of
transactions, location, population density, number of other
agents, maximum expected transaction, etc.
- Establishment of float-planning tools – ex. the MTN “1.5x
stock rule” saying that agents should have one and a half time
the amount of operations conducted the day before in both
cash and e-money float.
- Recruitment of super agents who can buy and sell cash to
retailers in order to help them rebalance in exchange of a
small fee (diminution of the liquidity management
opportunity cost).
- Recruitment of master agents who owns multiples outlets
(internalisation of the rebalancing mechanism within a
network of linked agents).
- Recruitment of master agents with outlets in several
geographical areas (in order to balance the disparities in
cash-in/cash out within different contexts).
- Improvement of the value-proposition for rebalancing
operations – subsidisation of travels to the branches, give
agents priority service at the branches, etc.
Sources : MTN (2012), CGAP (2011) and MicroSave (2012)
Liquidity management issues have a crucial impact on the Agent Network business model, and the challenges to agent
banking networks are specific.
• Challenges :
- Cash and Float very rarely balance in the short-run and this problem is exacerbated in rural areas.
• Best practices
- Structural improvements aim at reducing the likelihood of agents having liquidity management problems.
- Specific rebalancing mechanism’ ameliorations aim at smoothing up the replenishment process when such problems
occur.
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- Urban/rural divide – not the same kind of demand and costs so there is a necessity to adapt the commissions and fees.
- Balance between early agent retention and sustainability of their revenues (registration vs. transaction commissions).
Sources : GSMA (2012), CGAP (2011)
Ensuring that every stakeholder has good reasons to remain in the system and incentives to perform is a vital necessity for
agent banking networks.
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Best Practices ?
- Pay agents for every services they provide, regardless of what the customer is charged.
- Pay commissions regularly and transparently : providing agents with a clear view of what they have earned through their
involvement in the network (example of EKO and AV Villas initiatives).
- Use differentiated commissions for different products – from the analysis of a wide range of agent banking models, we
notice that :
- Flat fees are mostly used for account opening and account maintenance (if charged).
- Percentage and tiered systems are used for deposits and withdrawals.
- Dynamic registration/transaction fees structure over time – Set high commission for new registrations to ease customer
acquisition during the early phase. Then, increase transaction commissions (resp. decrease registration one) when the
market is mature to build a sustainable business model for agents.
- Condition the payment of registration fees to a certain level of activity by the newly registered client (example of Zain’s
ZAP in Tanzania who pays 1$ per registration with 2/3 of this sum pending on the fact that the customer has made 6
transactions in the next 6 months).
- Adopting a tiered system on the basis of activity level (number of transaction) – example of a Colombian provider.

- Identify and respond to agent-related risks.
- Plan potential losses in business/financial projections.
As for monitoring and support, risk mitigation is a cross-cutting issue involving multiple different components of the agent
banking model
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Best Practices ?
- Recruit risk-minimising agents – minimal suitability criteria in terms of cash-handling, foot traffic, local reputation, etc.
- Include risk-related training modules – at minimum on KYC, AML/CFT, equipment operation and troubleshooting,
complaints handling, and identification of counterfeit money.
- Ensure the security of cash deposits and liquidity management at agent’s – lower the cash limit, require secure premises,
use armored cars and trained staff to carry cash around.
- Set-up fraud-fighting MIS – with dedicated algorithms monitoring transactions and identifying suspicions transaction
patterns (ex. multiple failures for the PIN code).
- Run periodic reviews of the agent network and establish internal controls, audits & regulatory reporting.
- Invest in and requires insurance coverage – for the bank itself, agents and ANM against a variety of risks.
- Have solid contingency mechanisms – establish contingency plans against a variety of disruptions, realized risks and run
regular contingency simulations testing facilities, procedures and systems.

- Maintaining a decent level of quality controls for a large network of independent/heterogeneous agents.
- Translate quality controls into actual agent network improvements.
Monitoring and support is a vital cross-cutting component of any agent banking model. It allows quality checks and
improvements in multiple other areas (liquidity management, training, marketing, etc.)
33
Best Practices ?
- Carefully determine who will be tasked with overall and specific monitoring missions (e.g. ANMs are often in charge of
liquidity monitoring by rarely take the lead on overall monitoring). A dedicated team – in-house or outsourced, ex. M-
Pesa’s hiring of Top Image – should be in place.
- Have a standardised – ex. Top Image’s staff following a checklist and precise procedure – and simple – just check for
compliance/non-compliance – monitoring process.
- Have clear and strict policies in case of non-compliance – x unsatisfying points = mandatory training, y unsatisfying points
= suspension of activity.
- Put site visits at the center of the monitoring & support framework.
- Use technology-enabled remote controls as a way to increase the cost-effectiveness of site visits – ex. Telecom Service
(Brazil) using MIS to monitor liquidity, EKO & FINO using SMS-based monitoring.
- Increase the stakes from monitoring, ex. alter the commission structure according to the performances.
- Keep it simple and focus on elements that are central to ensuring a consistent customer experience : 1) correct liquidity
management, 2) correct processes (KYC, operations), 3) consistent environment (branding and identity, but above all,
agent number and pricing poster).

Banking in Rwanda
3. Best practices
34

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1) Awareness
4) Business Model
2) Inactivity
3) Ecosystem and acceptance network
 More and more, people have
heard of Mobile Money but
usually do not understand the
whole range of services.
 The awareness is difficult to
build up in remote areas.
 Illiteracy is an issue difficult to
overcome.
 Depending on the country but
often more that 80 % of the
registered Mobile Money clients
do not use it.
 A few Mobile Money solutions
have more that 50% of active
clients in their database (clients
having conducted a transaction
within the last 30 days).
 There is a disparity between
the number of Mobile Money
solutions in urban and in rural
areas.
 Mobile Money solutions have
not enrolled enough partners
to keep the “e-value” in the
loop.
 80% of the DFS solutions
worldwide are not profitable.
 In most countries, agents do not
earn enough commissions to
make it a living.
 Cash out fees are still expensive
for the end-users.
In the world, DFS are facing key challenges in the uptake of the service

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Possible roadmap
Studies1
Development of a
Business Model2 Pilot3
Customer study Product definition
Integration in the
institution
Staff training
Customer awareness
Legal “study”
Identify the right
Partners and delivery
channels
Roll Out4
Pilot evaluation
Soft Launch
Identify the client’s
needs
“Evaluation” of the
MIS
Business Model
definition (including
financial costing)
Full Launch

 What kind of Branchless Banking services are allowed by the regulator (Mobile
Banking, agent banking…)?
 Does it require pre-approval ?
 Depending on the service, which authority (or authorities) will be in charge of its
supervision (if any) ?
Regulation1
1/ Within the environment of the institution
 Which initiatives /organizations have initiated a MMS?
 What is the uptake level of the service ? Could we consider it successful ?
 Did this solution have some problems with the Central Bank ?
 How many clients are they ? How many active clients/ agents are they ?
 Which is the institution with the biggest footprint ?
 Is this solution interoperable ?
 Would this solution require an “exclusivity” clause ?
 What would this solution be willing to offer to the financial institution ? (marketing
material, awareness events…)
 Do the clients feel that one operator doesn’t match the image of the institution?
 Are the clients more client of one operator compared to another ?
Acceptance
networks
(Mobile
money
Solutions…)
2
37

1/ Within the environment of the institution
 What are the other initiatives in terms of Branchless Banking in the country ?
 What is the uptake of the service ?
 Is it successful or not ? Why ?
 What are the main challenges faced by this institution ?
 How is it overcoming the challenges at stake ?
 Did the institution carefully study the initiatives offered by the concurrence ? Did
the institution do a benchmark on the BB initiative ?
 Would I consider to develop a partnership with the institution having this BB
initiative ?
Other
Branchless
Banking
initiatives
3
Other
initiatives
 Has any funder be interested in funding some initiatives ?
4
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 What is the MIS capable of ? Does it work in real time ?
 Did the institution experience major technical glitches during the past 6 months ?
 Did the institution study how much it implies in terms cost & time with another
acceptance network (if any)?
 Does it require the development of middleware software?
 Who will be assuming the costs of the technical integration ?
IT3
2/ Within the institution
 Did the managing team took the time to understand all that there is at stake with a
Branchless Banking solution ?
 Has the institution conducted a Business Model on this matter (including financial
forecasts) ?
 What is the main reason of the development of the solution ?
General1
 Has the institution carried out a study with the clients on Branchless Banking (BB)?
(it doesn’t have to be a qualitative one ? )
 What is the main reason motivating the clients to use a BB initiative ?
 Is the client willing to pay to use this service ?
Demand2
39

2/ Within the institution
 Does the institution understand well the prices at stake to develop a BB service ?
 CAPEX (Capital expenditures) ?
 OPEX (Operating expenditures) ?
 Is the institution willing to incentivize its staff to make the service work ?
 How does the institution plan to make the investment ?
Financial
forecasts?
4
 Would the institution be willing to recruit new people in charge of the awareness
and coaching on this matter ?
 What is the awareness and marketing strategy ?
Awareness5
 Has the institution thought about the project team members in charge of
implementing and monitoring this new service ?
 Do they have the time? If not, does the organization plan to hire new staff?
 Is it possible to involve in this project staff from different departments/services
(accounting, IT, regulatory, operation, internal control & audit…)?
Human
Resources
6
40

41
 Understand the costs around the DFS.
 Think about a strategy –market entry.
 Be certain that there is a need for a DFS and that it would bring some value to your
clients.
 Cost is a big issue ( “tech is not cheap”).
 Develop partnerships to keep the loop open as much as possible. Try as much as
possible not to sign any “exclusive” contract.
 Define reachable indicators and other KPIs.
 Make sure that Digital Financial Services (DFS) is what you need and make sure that the
connectivity in the targeted area is reliable enough.
 Carefully think about the DFS services you want to offer. Strategic planning is important.
 Make sure that your clients do not have to switch from one operator to another to use
this service.
 Do not copy-paste, DFS are very much linked to the local contexts.
 Have discussions with your regulator to see whether it will be complicated to get an
agreement.
 Be sure that the DFS you are offering is compliant with limits of the Mobile Money
Solution.
 Make sure that the Partner you will be working with has a reliable agent network (in
terms of liquidity).
 Think big but start small!
General
1/ Before the Implementation
Business Model
Source : Interviews and presentations from PHB, UOB, PAMIGA, EIB, FINCA.

42
 Understand the IT requirements (do your MFI needs to buy a solution, develop a
middleware).IT
1/ Before the Implementation

43
 Take the time to explain to your clients what a DFS is.
 Conduct awareness and marketing campaigns.
 Staff from your institution must be sufficiently trained and use this service
themselves.
 Take your time to learn and study past case studies and examples..
 Consider incentives to execute the innovation program successfully.
 Pilot the service before rolling out it.
 Involve all departments of the financial institution; operations, legal and regulatory,
marketing, human resources, IT, finance – accounting and internal audit.
 Make sure that the enrolled client is active and knows how to conduct a transaction.
General
2/ During the Implementation
Awareness

1) How to make win – win partnerships between Mobile Money Solutions and Agency Banking Solutions ?
2) Do we do enough in terms of client protection ?
3) Are the targeted clients able to understand and use Digital Financial Services ?
4) Should the operators “share their agents” ?
5) Investments done by the actors are important… How to quickly reach a mass market ?
Considering that the Agency Banking is quickly growing, some key questions are to be answered by the
industry.
45

Contacts
Lead Consultant
Simon Priollaud
Digital Financial Services Manager
spriollaud@planetfinance.org
Access to Finance Rwanda
Ivan Murenzi
Financial Inclusion Specialist
ivan@afr.rw
46

48
Legal and policy timeline of Rwanda’s financial sector (1999 – 2015)
These encouraging trends and challenges are supported and addressed by a proactive policy and regulatory environment.
Regulation – Legal framework ( )
 Strong regulatory environment covering all the actors (formal banks to SACCOs) and the different issues
(organisation, financing, customer protection).
 National Bank of Rwanda (NBR) acts as the main regulator for the institutions it licenses.
Policies – Political initiatives ( )
 Commitment to financial sector development and financial inclusion through multiple initiatives.
 Ambitious short-term objectives: 80% financial inclusion by 2017.
 Under the current FSDP II: Action plan for financial literacy, development of infrastructure and institutions,
completion of the legal framework, etc.
 Additionally, AFR through its 2015 – 2020 strategic plan is involved in. It’s in that context that Planet Finance was charge
to review the deployment of an Agent Banking Model by a Microfinance Bank.
Sources: Rwanda Legal Information Portal (2015)
Click the icon to go back

49
Bank 1 is a commercial bank operating in 6 countries (HQ in Kenya). It launched its agent banking service first in Kenya (2011)
before rolling it out in Rwanda in 2012 (1st provider in the country) – 1,000 agents but chose to retire (temporarily) from
Rwanda in 2014 because of disappointing results.
.
Bank 1’s failure to build a profitable agent banking model in Rwanda mainly derives from the inadequateness
of its payment technology in regard to the country context of relatively lower technology adoption
Products - Deposit, withdrawal, water bill payment and transfer.
Network management - Direct recruitment and management (no third-party Agent Network Manager), difficulties
faced in recruiting agents satisfying the requirements.
Technology – Mobile phones (USSD menu), no POS payment solution (strongly unadapted to the needs of the
poorest unbanked segments of the population in terms of mobile penetration and customer habits).
KYC and processes – Unknown KYC procedures, but due to the unsuitability of Bank 1’s technology (no POS option),
the cash-in/out process was relatively hard.
Cost structure – Fee (undisclosed amount) for transactions (free deposits), commissions paid to agents (incl.
deposits).
Marketing – Rebranding of shops, press campaign around the fact it was the first AB service in Rwanda.
1
Sources: Bank’s website (2015)

50
Launched in August 2012, only ten months after having opened a greenfield subsidiary in Rwanda but Bank 2’s AB service in
Rwanda benefits from its successful Kenyan experience. 727 agents as of December 2013 but only 540 actives. 73% of deposits
are currently made and 67% of accounts are opened via agents but still low absolute figures and slow uptake.
.
Bank 2’s newly-created agent banking service in Rwanda proves that specific challenges arise from the local
context
Products - Deposit, withdrawal, water bill payment, airtime top-up and account opening.
Network management - Direct recruitment & management by “Agents supervisors” in branches (same as Bank 2’s
AB model in Kenya) but lack of staff and subsequent impact on training, support and monitoring capacities.
Technology – POS and mobile phones (USSD menu), integrated to Bank 2’s core banking platform in Kenya but
regular problems of connectivity because of Rwanda’s weaker infrastructure networks.
KYC and processes – Same as Bank 2’s model in Kenya, only with more delays for card issuance as this step is done
in Nairobi. However, the technology to produce debit cards was transferred from Bank 2’s Nairobi Headquarter to
Rwanda and is currently tested in one branch.
Cost structure – Fee (undisclosed amount) for transactions (free deposits), commissions paid to agents (incl.
deposits and account openings).
Marketing – Systemic rebranding of agents’ outlets and same intensive marketing campaigns (major events such as
TV/radio commercials, targeted marketing).
2

51
Bank 3 is the biggest bank in Rwanda in terms of total assets, loans and deposits. In July 2013, it launched an agent banking
service which operates on the mVisa Agent Banking platform. Drawing on the network of mVisa agents, this service currently
deploys more than 400 agents across Rwanda.
Bank 3 is one of the only two banks in Rwanda to propose agent banking services through the mVisa platform.
Products - Deposit, withdrawal, transfer, bill payment, airtime top-up, mini-statement, account opening. 3 different
accounts are offered to BK mVisa clients depending on their average expected balance.
Network management - Leveraging mVisa’s agents. Innovative use of a vehicle acting as a branch to conduct
rebalancing operations for agents.
Technology – Mobile phones (USSD menu) and plans to roll out POS. Internet application for the agents. Uses the
mVisa Platform and intends to partner with the 3 Mobile Money Solutions.
KYC and processes – Account opening is the same as in Bank 3’s branches and only the ID is required for
transactions.
Cost structure – Mostly free tor the client.
Marketing – Above The Line marketing (media, press articles, etc.), rebranding of outlets, etc.
3

52
With 250,000 deposit customers and 40,000 loan customers, Bank 4 is the largest microfinance bank in Rwanda. In 2013, it
launched an agent banking platform that it had started preparing in November 2013. This initiative now comprises 215 agents
and more than 46,000 customers, it is the first Agent Banking model implemented by a microfinance bank in Rwanda.
Bank 4 is among the pioneers of agency banking in the microfinance sector.
Products – Deposit with interests, withdrawal, loan repayment, bill payment, airtime top-up, life-insurance, balance
enquiry. Constant work to redesign and fine-tune products (e.g. savings and Teganya account).
Network management - Direct recruitment and management by 5 Agent supporting staff (1 for every 2 branches)
and use of a specialized agent management system. Interoperable network (users can use any mVisa agents).
Implementation of pilots to improve agents’ liquidity management.
Technology – Mobile phones (USSD menu). Uses the mVisa platform. Integration of Bank 4’s core banking system
with Visa’s Mobile Money System (VMMS).
KYC and process – Only need to have an ID card and any Mobile phone (works through USSD).
Cost structure – Customer fees for transactions (free deposits). Commissions paid to agents (incl. deposits) –
average monthly commission per agent is RwF 28,000 ($40).
Marketing – Marketing campaigns. Bank 4 relies on its loan officers to broadcast the service.
4

53
Equity Bank is a commercial bank present in 5 African countries (HQ in Kenya) launched an Agent Banking (AB) service in 2010
in Kenya. The service meets a large success (7,000 agents, 2,3 million clients, 80k transactions/day in 2013) deemed as the role-
model for AB in Africa.
Sources: UNCDF Microlead (2014), Microsave Briefing Note 140 (2013) and EB’s website (2015)
Equity Bank’s success story in agent banking lies in its ability to mobilize dedicated staff, relevant products,
adequate payment technologies and effective marketing solutions
Products - Deposit, withdrawal, water bill payment, airtime top-up and account opening.
Network management - Direct recruitment & management from “Agents supervisors” in branches, intensive on-
site training, support and frequent monitoring.
Technology – POS and mobile phones (via EB’s “Eazzy 247” mobile banking service compatible with all operators),
integrated to EB’s core banking platform.
KYC – Relatively easy for account opening: basic KYC form and photograph – deposits via mobile are immediately
enabled, card (5$ automatically debited from customer’s account) is issued and received within a few days.
Cost structure – KSh 45 ($0.5) fee for transactions (free deposits), commissions paid to agents (including deposits &
account openings).
Marketing – Systemic rebranding of agents’ outlets and aggressive marketing (major events such as road shows, TV
and radio talk-shows, etc.).

Focus on the Equity Bank’s structure
Organization of Equity Bank’s Agent network in Kenya – Source :
Microsave (2014)
• Beyond these structural features, Equity Bank’s success also draws on more “micro” characteristics such as :
 Careful selection based on concrete guidelines taking into account strategic business location, level of security,
accessibility and visibility, reputation and moral standing, etc.
 Intensive training sessions.
 High level of support (operational support, branding, liquidity management, etc.) from branch-based agent
managers.
• The success of Equity Bank’s agent banking model is largely
due to its direct and integrated approach to agent
recruitment and management.
 Equity Bank does not resort to a 3rd party company
for agent network management. Instead, agents are
recruited and managed through EB’s local branches.
Agents Supervisors (AS) are fully employed to this
task with a maximum threshold of 1 supervisor per 40
agents.
 In addition, a specific “Agency Banking” department
at the Head Office – reporting to the Director of
Operations – supervises the whole network and take
care of its strategic deployment.
54

55
FINCA is a microfinance group present in 6 African countries. It implemented a pilot agent network in DRC in 2012 and
generalized it – under the name “FINCA express” – in 2014. It currently counts on 130 agents in Kinshasa and throughout the
country.
FINCA’s successful implementation agency banking in DRC demonstrates that a long pilot phase allows
tailoring the services to customer’s needs and fine-tuning it to the specificities of the local market.
Products - Initially loan repayments but also deposit & withdrawal. Card application and account opening only
available at agents’ outlets when FINCA’s field personnel is present.
Network management - Direct recruitment & monitoring (no 3rd-party Agent Network Manager), emphasis on
training (financial education, liquidity management)
Technology – Biometric POS devices (using fingerprints as the identification method)
KYC and processes – Systematically and very simply done for standard transaction (fingerprint + account number).
KYC for account opening supervised by FINCA staff during weekly marketing events.
Cost structure – FINCA pays for everything: no transaction fee for clients, commissions and monthly retainer (pilot)
paid to agents. Average CAPEX per agent: $1,600 vs. $200,000 for a brick and mortar branch.
Marketing – Initially targeted to the young Congolese (outreach officers in schools) during the pilot but aggressive in
general (rebranding outlets, DRC-wide information campaign one year before official launch, etc.)
Source: FINCA (2012)

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