In Nepal only 25% customers are banked through formal channels and a large majority of close to 40% are served through informal channels like cooperatives and FINGOs, the rest are unbanked. Mainstream financial institutions are concentrated in urban areas and presence in rural and remote areas is limited. Digital Financial Services (DFS), specifically branchless banking, has the power to transform the number of unbanked people that have access to safe formal financial services in Nepal.

Over the course of 2014 MM4P commissioned a number of research on the demand for DFS and agent networks and channels to reach rural unbanked people in Nepal.

Perhaps the biggest barrier preventing poor people from accessing digital financial services is the cost and complexity of building and managing a sustainable cash-in/cash-out (CICO) agent network across a broad geography. A related challenge is that there is no systematic data assessing the design and performance of agent networks around the world. This makes it difficult to identify the factors responsible for the success or failure of a particular agent networks and how these factors vary by deployment and geography.

Agent network assessment was aimed to provide an independent view of the existing deployment. The insights produced by this study, will include incisive analyses that the provider of financial services could make use of while developing their agent banking plans.

The study generated a rich, cross-country comparable dataset across several agent networks, stimulating research into the deployment- and country-level indicators that predict the success of agent networks. It also touched on the customer perspective on their expectations on banking services and using the channels as mentioned above for financial services delivery.