FINCA DRC pilot phase experience with PoS Agency Network to deliver financial services to Youth

1. Confidential FINCA DRC pilot phase experience with PoS Agency Network to deliver financial services to Youth Jean KABONGO KALONJI Development Channels Manager FINCA DRC September 2012

2. FINCA DRC Agency NetworkService overview

3. FINCA DRC Agency NetworkThe benefit of using technology to reach Youth The distance from bank branches (youth and others clients are spending $0.73 on an average per transaction in urban areas and $2.40 in rural areas (round trip), the high cost of servicing low-balance accounts (youth account with opening balance= $1), decrease foot traffic in our branches and also broadening and deepening outreach are key reasons. Through its marketing and client survey process, FINCA DRC has been made aware of client’s desire and need for convenience and closeness to be able to do financial transactions where they live, work or go to school.

4. FINCA DRC Agency NetworkCost/Sustainability Total OPEX and CAPEX costs for opening an agency outlet are up to 70% less than opening a full service branch, thus potentially passing these cost savings onto the client. Per Agent FINCA equips the agents with biometric POS device, FINCA signage and branding as well two process maps, rolls of paper. At all, the estimated cost per agent is approximately $1,600. Per Branch Setting up a full branch costs is approximately $200,000

5. FINCA DRC Agency NetworkHow FINCA uses the PoS network to serve the Youth market The agency network first and foremost is a cash transaction channel, which enable FINCA DRC to conduct more transactions at lower cost. In additional, the agent location offers during the fix visit of the FINCA field personnel others services such as savings account opening and PoS cards application. The FINCA Outreach Officers are working very closely with schools to enable Youth to open savings account and start conduct transactions at the agent location without having to go to a FINCA branch.

6. FINCA DRC Agency NetworkFINCA strategies to market the technology to Youth • FINCA DRC offers youth financial literacy training as well as savings products. Youth engaged in the training session receives one session on FINCA and its products and delivery channels. • Direct marketing to Youth on the usage of the savings account • Select potential agent locations within close proximity to schools evensome schools as agents • Conduct weekly deposit collection with PoS Device in schools

7. FINCA DRC Agency NetworkLesson learned • The big lesson learned is how to manage the agency network. • The outcome here is the “FINCA Agent Management Program.” This program will enable FINCA to achieve the following : • Recruit, train and commence new operations with new agents • Monitoring visits to agent to ensure compliance with the FINCA standard by using the assessment tool • Regular status checks on liquidity levels • Resolve most operations issues • Monitor agents and Track and manage liquidity variables; • Mystery shopping to monitor level of customer service provided by agents, especially towards youth

8. FINCA DRC Agency NetworkChallenges • FINCA DRC plans to address challenges that were seen during the pilot and make adjustments accordingly. • Ideal profile of a POS agent, and based on that, develop a prototype for the types of agents FINCA would like to target; • 2) How can FINCA better serve youth client and how can FINCA mobilize uptake and usage of the technology; • 3) Overdraft facility for agent to face the liquidity issue • 4) Commission fees and structure to best serve our agents and clients; • 5) Extend customer service support in off-hours to both clients and agents; • 7) Staffing to accommodate and properly supervise a growing activities and agent network. • 8) Ressources needed to manage a large number of individual agents