GSMA's 2017 State of the Industry reports a global total of 5.3 million agents, an impressive sixfold increase over the 886,000 agents in existence just five years ago. However, the bulk of digital financial services (DFS) agents are in urban or peri-urban areas, and research by CGAP and others demonstrates that business-as-usual practices will not be enough for agents to penetrate frontier areas significantly. This has real implications for financial inclusion and the gradual shift toward a digital economy, since agents represent the on-ramp to the digital accounts. Proximity to agents affects both uptake and use of digital financial services, even in the most successful DFS markets in the world. In the vast majority of countries, most people still primarily transact in cash, and as long as this is the case, a ubiquitous cash-in, cash-out (CICO) system in close proximity to everyone will be critical for increasing financial inclusion.

In this blog series, CGAP explores some of the innovative approaches that providers are taking to improve the viability of their agent networks in frontier — or hard to serve — areas. Drawing on CGAP experiments and research with partners from Mexico to India and Tanzania to Brazil, we will demonstrate what geospatial analytics can bring to our understanding of the frontier agents challenge and how to overcome it. We will also highlight the initial results of a model where a pay-as-you-go (PAYGo) solar company — whose core business relies on active mobile money use in remote and rural areas — became a master agent to expand its agent footprint in underserved areas. By leveraging synergies in their business models, PAYGo companies are uniquely placed to play a role in solving the frontier agents challenge.