Mobile money agents shun rural communities

Limited deposit transactions are pushing away mobile money agents in the rural communities, a situation consumers feel threatens financial inclusion.

Reserve Bank of Malawi figures indicate that between July and September, the number of registered mobile money agents rose by 9.7 per cent to 75 773 but geographical distribution of agents remains a challenge as the majority are located in urban and semi-urban areas.

For instance, out of the total number of agents, 77.5 percent (58 730) are located in urban and semi-urban areas with the remaining 22.5 percent (17 043) located in rural areas.

In an interview on Monday, Consumers Association of Malawi (Cama) executive director John Kapito observed that most of the agents in rural areas are involved more in cash withdraws.

He said: “Most of the rural consumers only go to mobile money agents to withdraw cash and this requires that the agent has enough money to sustain the business.

“Another challenge is that there is connectivity challenges in most of the rural areas, making access to the services difficult.”

A Blantyre-based mobile money agent Yanjanani Banda said he tried to open an outlet in his home village in Kasungu but with few transactions, he could not sustain the business.

Mobile money agents remain a critical stakeholder in the delivery of mobile money services in the country as they interface directly with the customers.

Building a robust agent network is therefore essential for effective delivery of mobile money services.

During the period under review, there was an increase in activity rates for mobile money agents to 66.5 percent from 61 per cent recorded during the second quarter of 2020.

However, only 55.1 per cent of agents based in rural areas were active over a 90-day period compared to 68.7 per cent of those based in urban and semi-urban areas.

“Service providers should therefore implement deliberate interventions targeting rural areas in order to increase both the footprint of agents as well as giving them incentives to remain active,” said RBM in its 2020 Third Quarter National Payment Systems Report published on Thursday.

One of the players in the industry, Mpamba, said it is implementing the kiosks and Mpamba branches whose main focus is rural penetration.

“We are also expanding network coverage to increase coverage and penetration that will in turn allow for more users and hence more Mpamba customers and agents,” said TNM head of brand and marketing communications Louis Chipofya.