KM INSIGHT RESEARCH BRIEF March 2024
Knowledge Management
The Challenges and Experiences of India’s Banking Agents and Opportunity’s Agent Training v3.2
Opportunity Market Research on Banking Correspondent Training Shows Promise Project Overview Recognizing the potential of women agents in financial inclusion, Opportunity, in collaboration with its training partners, embarked on a Banking Correspondent (BC) training program designed with female agents - and female customers – in mind. Key Research Findings 1. General Characteristics of BC businesses: Most Banking Correspondents (BCs) represent a single bank and run the BC business alongside another business. 2. Marketing and Marketing Engagement: BCs attract customers with diverse strategies and prioritize respectful communication and customer care to build trust with customers. 3. Financial Performance and Expectations: BC revenues increased after the training; however, earnings are often not sufficient to cover costs.1 4. Response to BC Training: BC Training satisfaction is high, with gender training influential. 5. Demand for Training: BCs are confident, seek more training, and prefer mobile-based, online learning formats. 6. Demand for Investment Products: Some BCs are familiar with investment products and interested in being trained in and offering investment products, but more research is needed to mitigate BC and customer risk. 7. Financial Inclusion and Economic Development: BCs highly value their contribution to financial inclusion and economic development within their communities, and gain respect from being BCs. To better serve marginalized populations like the elderly and less literate customers, BCs likely need better tools and training. 8. Gender: The gender training component was influential in improving BC customer service to women, and the main advice BCs have for female BCs is, “Get trained and be confident.”
RESEARCH CONTEXT1 Despite the active efforts of the government and the Reserve Bank of India to promote financial inclusion, a significant portion of Indian society, especially those with low incomes, still face barriers to formal financial and digital access. This issue is more prevalent among women, with 23% remaining excluded from formal finance. Although 77% of women have bank or savings accounts only 35% of such accounts are active. Women are also 28% less likely than men to own a mobile phone.2 To address this challenge, the Reserve Bank of India initiated the Business Correspondent (BC) program in 2006. This program aims to enhance banking services in underserved areas through BCs. These agents, often grassroots entrepreneurs, such as grocery store or petrol station owners, are equipped to conduct banking operations and are compensated through commissions and fees. As of 2020, there were almost 1.2 million BCs in India with close to 3.3 million outlets. Yet, less than 10% of BCs are women.3 ♦
OPPORTUNITY’S BC TRAINING Recognizing the potential of women agents to better serve female customers, Opportunity, in collaboration with its training partners, embarked on a BC training program designed with female agents and customers in mind. In 2022-2023, Opportunity successfully piloted a
blended in-person and on-line training in which 98% passed the certification exam. In 2023, Opportunity scaled up tutor-facilitated online training for participants. As of March 2024, there were 2,115 of participants from 6 regions using two Indian languages. Half of participants were women. Although the training focused on becoming certified, it covers the fundamentals of the BC business. ♦
THE RESEARCH METHODOLOGY In January 2024, Opportunity conducted a telephone survey in India with the aim of gaining deeper insights into– • The effectiveness of Opportunity's training for participant BC operations; • The interest and demand for further training to enhance the success of BC businesses; and • Information about the BC businesses to shape the direction of future program design. A total of 60 individuals participated in the survey, conversing in two different languages. Half of these participants had undergone Opportunity’s BC Training, and approximately half were female. The results should be seen as preliminary indications rather than conclusive evidence. However, the outcomes provide noteworthy trends. It is advised that subsequent research should expand the pool of respondents to strengthen the data's reliability.4 ♦