Business Correspondent Network Managers (BCNM) Experiments Demonstrating Scale: Baseline Report

In 2006, the Reserve Bank of India (RBI) introduced the Banking Correspondent (BC) model as an innovative and cost-effective means to advance India’s national financial inclusion agenda. This model provides financial services at locations beyond bank branches and ATMs, allowing banks to engage local third-party, non-bank agents to extend doorstep delivery of basic financial products and services. The BC model has helped financial inclusion and was vital to the success of the Pradhan Mantri Jan Dhan Yojana (PMJDY) launched in 2014, which aimed to ensure all unbanked persons had a basic savings account. Under this financial inclusion program, over 420 million bank accounts were opened, of which 53% belonged to women. However, a 2021 report estimated that 55% of women’s PMJDY accounts go unused. To address the gap, the National Rural Livelihoods Mission adopted the Bank Sakhi model in 2015-16 to integrate female BCs into the network and progressively connect more women customers to formal financial services. Even in 2021, most reports suggest that less than 14% of agents working with Business Correspondent Network Managers (BCNM) in India are women.

The RBI continues to have faith in the BC model for the last-mile delivery of a basic bouquet of financial services while acknowledging its caveats. In alignment with India’s National Strategy for Financial Inclusion 2019-24 goals, Grameen Foundation USA and Grameen Foundation India, with support from the Bill & Melinda Gates Foundation, launched the BCNM Experiments and Demonstrating Scale (BEADS) project to address the sustainability of rural BCs. To include women as clients and BCs, BEADS endeavors to achieve the following project objectives:

  • Drive informed pilots with established BCNMs to test more cost-effective, agile and inclusive ways of selecting and onboarding BCs
  • Improve the viability of individual agents by testing various approaches to diversifying the product basket and increasing revenue

In pursuit of these objectives, Grameen conducted three pilots as a part of an action research agenda with four leading BCNMs, one small finance bank, and one woman-focused cooperative bank. The first pilot focused on developing new financial products that BCs could promote that increase their revenue and respond to client needs, especially female clients, and support BC income. The second pilot focuses on boosting the recruitment and retention of BCs, especially female agents, through improving BCNM and BC practices. The third pilot focuses on innovative marketing and customer education practices that BCs can leverage to improve awareness and uptake of existing products and services.

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