Although there is ample demand for mobile money services across Zambia, one of the key contributors to slow uptake of these services among customers is the challenge of liquidity management that agents have continuously faced.

It leads to situations where agents ‘bounce’ customers when they do not have enough float to handle the customers’ requests to deposit or withdraw money. Bouncing of customers in turn leads to low trust by customers, less traffic of customers, lower commissions for agents and slower business growth for agents.

FINCA Zambia, with the support of the United Nations Capital Development Fund (UNCDF), decided to explore the current challenges confronting agents and whether FINCA could provide a solution to them. To properly understand the contexts in which mobile money agents (specifically those of Airtel Money and MTN Mobile Money) work, the FINCA research team met with 331 agents (109 urban, 93 peri-urban and 129 rural agents) in 16 locations across 8 of 10 provinces in Zambia between May and June 2017 to understand their varied processes, constraints and financial lives. In a previous post, the UNCDF programme Mobile Money for the Poor presented profiles of some of the agents encountered during the study.

Testing agents’ appetite for a credit line

FINCA is currently building ‘push-pull’ functionality for its customers to link their accounts to their Airtel Money or MTN Mobile Money wallets. This push-pull functionality would allow movement of money between the mobile money agents’ accounts to increase capacity to serve clients with adequate float. The research FINCA completed with agents would help the organization define how to adapt its services so that agents could access instant float or capital from an overdraft/lending facility as well as what interest rate would be acceptable to agents.

Reception from agents

During the research, 86% of agents interviewed indicated a willingness to take up the proposed liquidity management solution, once it is available on the market. Concerns that would affect the development and marketing of the proposed solution were also uncovered. Read more to find out what the research revealed.

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