In July of this year, CRDB rolled out their agency banking channel supported by MicroLead. The channel is designed to allow CRDB to reach into rural areas and target low-income clients. Here, we interview Arnaud Rugema, Head of Business Development for CRDB Bank, Burundi, and a MicroLead partner.

Q: CRDB decided to leverage an existing agent network to expand outreach. Why did CRDB decide to use this model?

Arnaud: CRDB Bank Burundi SA only recently rolled out the agent banking model to serve clients. The bank decided to use this model because it is a cheaper method for expansion and reaching customers compared to the construction and management of brick and mortar branches. This is also part of our financial inclusion agenda over the next five years. The bank plans to increase the number of agents, including in rural areas, to serve Burundi’s large unbanked population. Note that some of our agents may also be agents of the MNOs {mobile network operators}, provided they meet our qualifications to work with us.

Q: What network did you partner with and why?

Arnaud: We partnered with an MNO, Econet Leo, as we had already integrated with them on our mobile banking platform. However, we are now also integrating with the MNO Lumite, as our expansion will reach further inland, where that MNO has the advantage. In short, we will use either MNO depending on their distribution area.

Q: How are agents compensated?

Arnaud: The agents are paid commissions on all transactions, i.e. on deposits, withdrawals and transfers. By December 2017, agents will be able to open accounts for new customers. We are providing attractive incentives to agents in order to gain their trust and to increase transactions, which we expect will improve our bottom line.

Q: What types of transactions do the agents perform?

Arnaud: Currently, agents can perform the following transactions:
• Cash withdrawals/deposits,
• Mini-statements,
• Balance enquiry,
• Third party deposits, and
• Transfer to other CRDB bank accounts.

Very soon, agents will be able to perform also the following:
• Facilitate account opening,
• Bill payments, and
• Issuance of bank cards.

The incorporation of these additional features is expected to be completed by end of December 2017.

Q: What surprised you about introducing agents?

Arnaud: Agent banking is actually a service which addresses the proximity issues of our network. We are receiving positive feedback from our customers indicating they now have access to their funds in multiple locations closer to their homes and/or business premises. In the past, customers were obliged to use either our ATMs (only available for withdrawals) and branches, especially for deposits. Now customers have more convenient access points, and the “bank” hours when using agents are longer compared to our branch hours. We hope that agent banking will bring on board additional customers, especially when we start opening accounts through agents and expanding to other areas.

Q: What advice do you have for other institutions interested in doing what CRDB did with agents?

Arnaud: As the banking environment is changing, banks are obliged to follow their customers. Previously, banks were putting up branches and waiting for customers to visit. In today’s world, banks need to develop solutions that really address the needs of customers. To banks that don’t have agents, we advise them to follow the agent route. It is a very cost-effective delivery model compared to operating traditional branches.

Thank you, Arnaud! For more information on agent banking, download our free DFS toolkits.

About MicroLead

MicroLead is a UNCDF-managed global initiative challenging regulated FSPs to develop and roll-out deposit services which respond to the rural vacuum of services. With the generous support of the Bill & Melinda Gates Foundation, The MasterCard Foundation and the LIFT Fund in Myanmar, MicroLead works with a variety of FSPs and technical service providers to reach rural markets, particularly women, with demand-driven, responsibly priced products offered via alternative delivery channels such as rural agents, mobile phones, roving agents, point of sales devices and group linkages. This is combined with financial education, so customers not only have access but can effectively use quality services.

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