One of the most striking findings from TheHelix’s Agent Network Accelerator (ANA) surveys has been the high levels of agents that have been in business for less than one year. In Tanzania, only 18%, and in Uganda 21%, of all agents had been in business for two years or more. In Kenya, 40% of agents had been in business for 2 years or more. In part, a large number of novice agents (in Uganda 52%, and in Tanzania 45%, of agents, have been in business for less than one year) may be ascribed to the rapid expansion of agent networks in these countries.
But a growing number of agents in Kenya are also complaining that they are simply not making enough money from the business. We have seen that overall agents in Kenya make a median monthly profit of $70 – compared to $78 in Uganda and $95 in Tanzania. However, disaggregating this to look at the rural agents, we can see that Kenyan rural agents only make a median profit of $53, compared to $86 in Uganda and $95 in Tanzania.
Agents primarily ascribe this to, “Too many other agents competing for business” as well as (to a lesser extent) challenges around float management. Should we conclude that “saturating the market” has limitations and drawbacks as a strategy?