In 2011, MicroSave examined the two modes of managing agent networks-through outsourced institutional ANMs, and directly through the banks-in the India Focus Notes 76 and 77.1 We arrived at a conclusion that institutional business correspondents were perhaps better suited both from the client as well as from the bankers’ perspective. Most banks in India have also chosen to adopt the institutional business correspondent model. However, some banks have started experimenting with agent networks they directly manage and supervise. In this Note we outline the core incentives to adopt a directly managed agent network. Bank-managed models appear to:

• Help to establish trust amongst clients
• Allow better remuneration of, and thus business cases for, agents
• Meet agents’ expectations of being associated with powerful bank brands
• Have a symbiotic impact on branch business
• Diversify the risk of agent dormancy and churn (which is concentrated with 3rd party institutional network managers)
• Improve the quality of customer service at the agent outlet where they are exclusive agents.

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