The People’s Own Savings Bank (POSB) is one of the active proponents of the agent banking model, and it has a significant footprint of agents across the country. The country’s sole savings bank was one of the big winners at the Inaugural Agent Banking and Digital Financial Services Awards held on July 14, 2016 and walked away with the Most Comprehensive Agent Banking Services Award.
Financial sector spotlight with Omen Muza
In this installment, NewsDay financial columnist Omen Nyevero Muza (ONM) talks to POSB chief executive officer Admore Kandlela (AK) on the bank’s current agent network, key considerations when recruiting agents, the benefits of the model and what the bank is doing to pre-empt the problem of agency dormancy. Kandlela also explains how the model can help in achieving national financial inclusion goals.
ONM: Earlier in the year, the Reserve Bank of Zimbabwe revealed that more than 3 000 banking agents had been set up around the country. Could you please describe your current network of agents?
AK: POSB currently has a sizeable number of agents that includes Zimpost, Meikles Financial Services, Wisrod Investments, TelOne and Zesa agents. We are anticipating additional agents to enrol on our network by year end.
ONM: What are some of the POSB’s key considerations when recruiting agents?
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AK: We are guided by Reserve Bank of Zimbabwe Prudential Guidelines for banks on the recruitment of agents. The bank also considers the foot traffic that the agent attracts, geographical location to ensure all our customers countrywide are able to access banking easily as well as the ability of the agent to uphold the brand.
ONM: From the bank’s perspective as an active proponent of the agent banking model, what benefits can be derived from this model?
AK: Banking has become accessible to previously unbanked people through the agency model thereby resonating with the Reserve Bank’s focus on financial inclusion. It is a low-cost solution to provide banking services to the people through increased agent outlets than expanding through costly brick and mortar structures managed by banks. Agents are motivated to offer the services through earning commission for the services they offer. The agent banking model has also created employment and business opportunities for agents.
ONM: Agent dormancy or inactivity is one of the potential problems of the agent banking model. What is the bank doing in order to pre-empt this challenge and create sustainable agents?
AK: The Bank has its fingers on the pulse of agents and monitors their activity. We have staff members who visit the agents to establish the challenges they face and areas where they can be assisted. The major challenge being faced by agents is usually cash shortages. To this end, POSB has enabled agents to offer bill payment services such as prepaid Zesa tokens, which help them to generate cash which they can then use to pay customers seeking withdrawals.
MFSB: Agent banking is increasingly seen as the next financial inclusion channel in Zimbabwe. Is this view shared by POSB and if so, please explain how the model can help in achieving national financial inclusion goals?
AK: Yes, we believe in agency banking as a channel which brings convenience to the marginalised populace of Zimbabwe especially in rural areas where 70% of the population of Zimbabwe resides. Agency banking represents a significant opportunity to reduce transaction costs such as travel costs for clients by bringing financial services to hard-to-reach and geographically dispersed areas. Agency banking brings accessibility to the bank by the less literate and vulnerable customers who would otherwise feel intimidated in bank branches.
MFSB: What would you say is the bank’s biggest achievement so far in terms of implementing the agent banking model?
AK: There has been an increase in the volume of transactions being channelled via the agency network. This has enabled the bank to decongest the branch network and reduce the demand for cash accessed via the same. On average, the agent network processes 80 000 transactions per month and the figures continue to increase.
Omen N Muza edits the MFSB. You can view his LinkedIn profile at zw.linkedin.com/pub/omen-n-muza/30/641/3b8 or initiate contact on omen.muza@gmail.com