UN Capital Development Fund (UNCDF) and its partners have been testing, developing and implementing shared space agent hub models in Zambia.

Agents play a catalytic role in the access and usage of digital financial services (DFS), especially in peri-urban and rural areas. Without agents providing these critical products and services from banks, mobile network operators, microfinance institutions and pay-go service providers, they would not be available to people in rural areas.

It is with this in mind that UNCDF partnered with Kazang and Mobicom to explore models of delivering DFS to rural populations through agent networks offering products and services from multiple financial service providers and non-financial service providers. Through the project, UNCDF will better understand the agents’ quality of life due to them becoming agents offering a variety of services.

Carol Nalwamba, 22, is a mobile money agent living in Kabwe, a large town in central Zambia. Since she left school in 2017, Carol frequently asked her parents for money for basic necessities such as toiletries and she was unable to contribute to her upkeep. However, in August 2020, her life turned around. She signed up as a mobile money agent. Now, her earnings provide her with enough money to support her needs and even save for further education.

“Someone told me of the opportunity to be an agent so I decided to try it. I like it. I can serve over a hundred customers a day, but I have to be vigilant. Month by month my commission has increased, which is good. I no longer have to beg for money,” said Carol.

Carol is an agent with Mobicom, a business that facilitates the distribution of digital financial services through its agent platform. Mobicom provides a shared agent banking platform to enable customers to conduct their financial transactions more easily, across various networks and banks thus overcoming limitations experienced with a lack of interoperability. This is immediately beneficial to the agents as they can conduct more transactions and increase earnings from commissions.

Mobicom partnered with UNCDF to embark on an innovative agent project that tests new use cases for rural Zambia. Another digital finance provider on this project is Kazang, who is increasing the availability of the point of sale (POS) machines. Through this project, Kazang will also leverage its agent network to distribute PayGo solar. Both companies will onboard more agents to expand the reach of these essential services. The project’s goal is for Kazang and Mobicom to grow their agent network to 600 agents by implementing 50 percent of their activities in rural and peri-urban areas. With this expanded agent network, the project aims to reach 45,000 active customers (60 percent female and 40 percent youth) and to deepen financial inclusion in remote areas. The project is being implemented in Central, Copperbelt, North-Western, and Southern provinces which all exhibit large under-served rural areas and growing peri-urban areas.

Agents are extended an overdraft to improve their liquidity for servicing customers. The overdraft facility is not provided automatically but is based on the value and volume of transactions that they complete in a day. The overdraft enables agents to conduct more transactions and manage their float to better serve customers.

The two distribution models are important to UNCDF because of the various roles that digital finance services can play. These models can play a role in:

i) improving the partners’ business models thus strengthening the sector;
ii) adding value for agents, which leads to an improvement in their livelihoods and,
iii) improving the accessibility to services that can uplift lives.

In addition, facilitating access to these services and products is invaluable for rural development as improved access sparks growth and expansion of rural communities’ activities and enables more women and youth to participate in the local economy.

Carol’s story is similar to many other agents who have recently joined the agent network business. Since September 2020, 184 agents have been active on the Kazang model, while 203 agents have been actively operating on the Mobicom model since July 2020. Many of these were inactive agents that have since been re-engaged to become active agents. Of the agents in these two models, 55 percent are female and 61 percent are youth, which indicates that this business model provides good employment and entrepreneurship opportunities for young people and women.

Regarding how profitable these models are for the agents, the majority of them self-reported that they have gradually increased their earnings month-on-month, proving that the two models provide greater opportunities for their mobile money business, enabling them to improve their livelihoods and contribute to their local economies. By having more women and youth agents, the service providers can attract the same demographics of customers, which means more women and youth will be empowered with the digital and financial skills they need to navigate services that are increasingly becoming digital.

With the agents that have been onboarded so far, the project has made good progress and is likely to achieve its targets by the time implementation ends in September 2021, which includes having 500 new active agents, 40 percent of them being in rural areas.

Hearing from the Agents

I’m able to manage the cash float and the e-Value well. Sometimes there are shortages of cash at pay-day so the float helps us keep serving the customers. – Carol Nalwamba, 22, Kabwe (Central Province)

I sell everything on Kazang and I also install the solar equipment. There is plenty of business and I’m able to serve the customers well. Sales increased in October, November and December and I am earning good commissions, though customer defaults present challenges when they occur. -- Angela Njovu, 56, Mumbwa (Central Province)

I was only farming before I began with Kazang Solar, but this business is good because it suits my lifestyle. There is a lot of need and market for solar in our area and people trust the Kazang products because they’re strong and durable. When I receive my overdraft I use it to make payouts so I can serve more customers. I’d like to increase the amount [of overdraft] because sometimes repayments from customers are not timely, but this can be solved if the overdraft was higher. -- Hijabe Yuji, 39, Monze (Southern Province)

I have been an agent selling solar for eight months and so far, my sales are going well. I can do installations for about 11 customers a month. I am responsible for my upkeep and rent and I’m saving to go to nursing school, so this job is very good for me. -- Doris Nyendwa, 20, Monze (Southern Province)