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Daily diaries: Reimagining how we generate insights to optimize cash-in, cash-out (CICO) agents

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Anant runs a cash-in cash-out (CICO) agency business in a rural part of Bihar state in eastern India. He works for one of the country’s largest nationalized banks. Unlike many CICO agents, Anant has no side business—the agency business is his only source of income. On the other hand, Yusuf from Bogor, Indonesia, runs his CICO agency alongside a mobile accessories business. Yusuf’s agency business accounts for around one-fifth of his total revenue. Ira is a FinTech agent from the same locality as Yusuf. She runs her agency business alongside a laundry shop, but it yields negligible income.

Anant, Yusuf, and Ira are among the estimated 18.4 million[1] CICO agents worldwide. Alongside traditional banking agents, the CICO community now has new-age agents, such as FinTech agents in Indonesia, mobile financial services (MFS) agents in Kenya and Bangladesh, and electronic money issuer (EMI) agents in Côte d’Ivoire and Senegal.

Yet how much do we really know about CICO agents? What do we know about their challenges and the support they need? MSC’s Agent Network Accelerator (ANA) program, which ran from 2013 to 2018, was designed precisely for this purpose—to increase the global understanding of ways to build and manage sustainable agent networks and identify factors that drive their success or failure. The multi-year research program covered 31,500 agents across 14 countries in Asia and Africa.

We have little nuanced data on the agents’ rapidly changing landscape worldwide.

A lot has happened since the closure of the ANA project. The COVID-19 pandemic changed the world permanently, and a new set of agents have emerged. Markets dominated by MFS agents have seen the entry and growth of banking agents, whereas markets dominated by banking agents have seen the entry of new-age agents. Data from the supply side that compares different agent types is absent, as are industry benchmarks for their performance, network size, and agent management practices, among other factors.

However, a deeper knowledge gap persists. Financial service providers need to understand the following if they wish to help CICO agents:

And all of the knowledge gaps outlined above need to be explored for each agent type so we can understand the needs and behavior of each type and design solutions accordingly.

A nuanced and lean approach for continual agent network assessment

Traditional surveys that provide a snapshot of the situation fail to capture the dynamic and volatile nature of the agency business’s economics, primarily in terms of its evolution over time and the effects of seasonality. Aspects related to the management of agency business relative to the core business of the agents (for non-dedicated agents) are often overlooked, even though these have huge implications on the overall agent sustainability. And, of course, running large-scale surveys on agents over time is a resource-intensive exercise.

However, we can make optimal choices on cost and time with the right data collection strategy that involves technology, instrument, and agent sampling, among other aspects, alongside study outputs and outcomes. These choices would optimize the duration of data collection and how quickly data is made available for review, among other aspects.

We can uncover critical insights if we use the Financial Diaries method to track the financial transactions of different types of agents over time—banking vs. FinTech vs. MFS, male vs. female. These insights would include: (i) the differences among the various types of agents; (ii) how the DFS business and other non-DFS businesses interact for non-dedicated agents; (iii) how they cope with the dynamic nature of the business; (iv) the challenges they face; and (v) the supervision and support they receive. These insights captured over time give a sense of how seasonality affects these aspects of the business.

This diaries approach is a nuanced research tool that can bridge all the data gaps if we have a suitable sample of different agent types. Traditional diaries research is resource-heavy, but a technology-driven approach, where diarists enter their daily data through an app, can reduce costs. It saves money by reducing the number of field researchers needed for data collection.

In MSC’s technology-driven Agent Diaries approach, the role of field researchers is limited to handholding and quality control since the diarists themselves upload the data. The data upload is almost real-time, as the diarists upload data daily. Thus it gives the research team more time to check data quality and make course corrections through re-training in the early phase of the research.

What have we learned from the Agent Diaries pilots in Indonesia and India?

MSC piloted the Agent Diaries approach with a small sample of agents in Indonesia and India. In Indonesia, we ran the research for 18 weeks with eight CICO agents—three Laku Pandai banking agents, two G2P banking agents, and three FinTech agents. The research pilot highlighted how the use cases and volume of transactions varied across agent types, how volatile the income of different agent types was, and the association between agents’ gender and the clients’ gender division. The data also indicated the trends are consistent over time. The insights helped us derive specific recommendations for service providers and regulators to manage volatility and utilize female agents more effectively.

In India, we focused the pilot on BC Sakhis—female CICO banking agents—members of self-help groups. We ran the research pilot with six CICO agents, comprising five BC Sakhis and one male banking agent. The research highlighted the differences in the income of male and female agents, pointed out the lack of use cases, and highlighted recommendations for service providers.

In India, we used a traditional approach of paper-based data collection by the agents and subsequent digitization of that data by field researchers. However, in Indonesia, we used a technology-driven lean approach. MSC’s DatIn app was specifically designed for data collection in diaries research. As agents are tech-savvy and digitally literate, they handled the Android application with ease.

We used this technological capability by asking the agents to enter their daily financial data on the DatIn app. After initial training and a few days of support, the data collection exercise became smooth, and the field researcher’s role was mostly limited to quality checks.

We are currently developing a feature in the DatIn app so that the diarists can see their income and expenses data in a graphical form in the app itself to understand how their business is doing. This feature will incentivize the agents to use the app to enter their daily data.

In our experience, a field researcher in a large-scale diaries research can handle around 25 diarists comfortably if they visit each diarist once in 15 days. However, if diarists do self-entry of data then the field researcher’s role becomes limited to handholding and data quality assurance. The majority of the handholding work can be done virtually as well. As the field researcher would not have to do any data entry work, they can cover around 50% more diarists on a given day, assuming the diarists are not widely scattered. Hence, we can cut the data collection cost by half using technology than a traditional diaries data collection approach.

To conclude

The Agent Diaries research approach can unpack nuances and also be implemented in a resource-optimized way. Multi-country, multi-year research using the Agent Diaries approach can prove crucial to help the new agent types to grow. And each stakeholder—regulators, financial service providers, agent network managers, and the agents themselves—will benefit from it. See more of our work on Agent Diaries and related research here and here.

[1] MSC estimates

Decoding the practices of CICO agents in Indonesia

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The landscape of CICO agents in Indonesia is transforming rapidly. MSC conducted a study to understand the world of these agents through our innovative diaries research methodology. The study engaged diverse financial agents across Indonesia’s dynamic landscape, such as banking, G2P, and FinTech agents. The study delved into various dimensions, including agency profitability, gender dynamics, and challenges these CICO agents faced. From the research insights, we created recommendations on various prospective use cases for agents to make their income less volatile and businesses sustainable.

Crisis, resilience, and adaptation: farming and financial services in times of climate change

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“I have lived through a lot. Sometimes too much,” says Krishna Lal wistfully.[1] He remembers his youth and early adulthood fondly as a time when life in the village was simple and his family usually had enough food on the table. In those days, the village was far away from bank branches, and anyway Krishna Lal and his family considered themselves “too poor for banks.” Instead, when they had emergencies, which usually arose when they needed doctors or medicines, they would borrow from local moneylenders.

Each year after the harvest, the family stored about half of the harvested crops—primarily rice in those days—to meet their consumption needs. They would sell the rest and invest the money in livestock, although they also hid away some money in clay pots around the household. Krishna Lal’s wife, Devi, saved small amounts through her beesi, a savings club that pays out to one of its members each monthly round. She would usually use the proceeds to buy household utensils. She also squirreled away small amounts without Krishna Lal’s knowledge—and used these secret funds to buy treats for her son, Abhishek, and daughter, Preeti.

This tranquil life changed in 2007 when the worst floods “in living memory” washed through the village, sweeping all they had before them. The rainfall in July was five times higher than the monthly average. By August, the entire village was underwater. These largely pluvial floods waterlogged the fields, destroyed the rice crops, and remained for many months.

Fortunately, Krishna Lal had good relations with the moneylenders, and so he could borrow several times to keep food on the family’s table. Yet, with the loss of the rice crops, Krishna Lal could not save any grain and had to keep borrowing. On some days, the family ate only one meal. Devi’s beesi saw many participants stop their monthly contributions. It took years and significant changes in membership to rebuild the trust.

In the period from 2009 until 2019, life in the village returned to normal and grew increasingly sophisticated. With improved roads to the market, farmers, including Krishna Lal began to grow a range of vegetables alongside these staples. Krishna Lal found okra particularly lucrative. Some small-scale floods occurred in this decade—most notably in 2019, but nothing of the scale seen in 2007-2008. However, all the villagers noted that the monsoon was less and less predictable, and that the summers were hotter than they remembered from earlier times.

It was in this period that Krishna Lal encouraged Devi to join a self-help group formed by a local NGO to save and sometimes even borrow to help manage the household finances. This helped reduce their dependence on local moneylenders. She found the meetings and the bookkeeping a chore, but when the group got access to bank-linkage loans, Devi could borrow to buy fertilizer and a TV. Krishna also increased the dosage of fertilizer as he was not getting the yield as before. These fertilizers he usually bought at a premium of almost 30-40% over the MRP due to short supply from local retailers.

In 2017, after many attempts, Krishna Lal managed to open a bank account under the government’s Pradhan Mantri Jan-Dhan Yojana (PMJDY) financial inclusion program. But the accounts were largely dormant as all the transactions happened in cash. The government’s zealous drive to ensure every adult in India had an account meant that bank staff and banking correspondents (agents) were heavily incentivized to open accounts, whether people needed them or not—so soon Krishna Lal had another PMJDY account, and Devi had one too. But since neither Krishna Lal nor Devi could get employment under the MGNREGA program, their accounts remained dormant from the moment the accounts were opened. Devi continued with her beesi, primarily for its social function—she enjoyed the chance to sit around and exchange village gossip with her friends from time to time.

In 2019 and 2021, the floods returned—with a vengeance—and Krishna Lal found out that he was not as resilient as he had believed. During these floods, he stopped growing rice and was focusing on wheat, which could be planted once flood waters recede in September or October and commanded higher prices in the market. But he started to worry about how much fertilizer he had to use to maintain output levels. He was also worried by the weather. May to July was unbearably hot and rains evaded their village until the end of July—he was unsure when to plant his rice seeds. Then it rained in a way he had never seen before. Within days, floods were rolling through his fields and then the village itself once again. It was like 2007 or worse. He was back to borrowing from moneylenders to keep food on the family table. Furthermore, the increased heat and humidity meant that his vegetables were infested with pests. Farming was no longer enough to finance his family’s needs—they had to think of ways to earn more.

Of course, 2020 was also the year that the COVID-19 pandemic hit. Finally, Devi’s PMJDY account proved useful—after she reactivated it, a process that took multiple trips to the bank branch. Soon, she received four payments of INR 500 (USD 6.67) each from the Government of India.

In 2022, the pressing need to find another source of income emboldened Devi to borrow both from her SHG and a microfinance institution she had recently joined. With the INR 9,000 (USD 120), she could stock a small kiosk in a kutcha lean-to that Krishna Lal built adjoining their house. Furthermore, her son Abhishek went to Kolkata where he found work as a day laborer at a construction site. When he could send money back to his parents, they started to withdraw the cash from an ATM outside the bank branch in the market town eight kilometers away using the RuPay card attached to their PMJDY account.

However, despite the small earnings from the kiosk and Abhishek’s intermittent remittances, the family still struggled to make ends meet. Krishna Lal had for many years dreamed of buying a water pump to irrigate his fields in times of drought and thus increase his yields. While the opportunity, and need, for this climate adaptation were stark, no one would lend him the large sum money he needed for this crucial piece of equipment. In 2022, he could really have used the pump as a merciless drought ravaged his crops from April to July. The heat was unbearable and the land was parched—it was useless to plant anything. And when the rains came in August, they were torrential…

“Farming has become such a lottery now that the weather gods are no longer our friends. Everyone in the village has sent their sons away to earn in the city—we have no other way to make ends meet”, sighs Krishna Lal. “Everything has changed.”

If we are to enable farmers like Krishna Lal to respond to the growing climate crisis, we will need to revolutionize financial services for agriculture to support both climate resilience and adaptation. The CIFAR Climate Resilient Agriculture (CRAg) working group has outlined what this will take and the central role that digital technology must play in this.

The Crag Virtual Club brings together innovative startups that work in climate-smart and climate-resilient agriculture alongside investors, international donor organizations, financial services providers, and implementation agencies. It enables the exchange of ideas to ultimately identify and upscale promising business models to strengthen climate resilience and adaptation for countless smallholder farmers, much like Krishna Lal. Join us!

[1] Krishna Lal is a composite archetype farmer derived from MSC’s extensive work in UP and Bihar on agriculture and climate change—his story is indicative.

The climate crisis is not gender neutral – women’s voices must be heard

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Source: (Randall, n.d.)

Women who grapple with poverty commonly face higher risks and more significants burdens from climate change’s impact. Climate change has multifaceted effects on women’s lives, which range from socioeconomic, cultural, behavioral, and health issues. Women’s unequal participation in decision-making processes and labor markets often prevents them from fully contributing to climate-related planning, policymaking, and implementation. The limited availability of gender-segregated data restricts in-depth assessments of climate change’s gender dimension.

With the increased data availability, a clear correlation arises between gender inequality and vulnerability to climate change. As per Tshakert et al. (2019), social and cultural factors help identify and anticipate future risks. Gender inequality leads to more biophysical and social vulnerability and lesser adaptive capacity in women than men (UNEP, 2023). Furthermore, the stakes go beyond the boundaries of economics or health when climate change is researched from a gender perspective.

We need to understand the gendered impacts of climate change to create a holistic understanding of its threats and measures to mitigate it.

This framework (Figure 1) is adapted from Yiridomoh Y. Gordon et al. (2019)—a study conducted on small-scale women farmers in Ghana to understand the adaptation to climate change and its derivatives. It observed that female farmers’ vulnerability to climate variability is rooted in gender-based cultural norms, household responsibilities, inaccessibility to assets and resources, and lack of information and suitable technology.

Figure 1: Conceptual framework that links women, climate variability, and adaptation

Source: Yiridomoh Y. Gordon et al. (2019)

Climate change’s gender impact also leads to other social implications for women:

  • Increase in women’s unpaid labor: Women face emotional stress and increased unpaid household work due to climate change, revealed an MSC study conducted on climate resilience among smallholder farmers in India. One respondent in the study noted, “Floods make the fuelwood and biomass soggy. It increases the cooking time substantially.” (MSC, 2023). Another often-cited case study comes from the “water wives of Maharashtra” of Denganmal village, 185 km from India’s financial capital, Mumbai (Blakemore, 2015). The village faces continuous droughts in summer and lacks water pipelines. The men of the village, who are predominantly farmers, marry more women to take care of the family’s water requirements. These women are typically from families that cannot afford a dowry[1] or widows who seek to regain their social status.
  • The increased toll of disasters: Girls in Bangladesh reported a rise in household work after a flood. They had to walk long distances to fetch water, clean their houses after a flood, and take leave from school to look after their homes. After disasters, families often employ girls in domestic service, agriculture, and textile factories, while boys mostly remain in school.

For instance, after Cyclone Sidr struck Bangladesh in 2007, people reported that many girls moved to urban areas to work in garment factories or engage in domestic work. Jhumu is an 18-year-old girl from Barguna, Bangladesh. She said, “Girls also work as domestic help with rich local families. Their families find it easier to stop their education—which is not the same with boys. Families want to continue their education.” (Swarup et al., 2011).

  • Increase in child marriages and subsequent violence: Research has established that climate change and other environmental crises multiply the drivers of child marriages, such as poverty, displacement, conflict, and loss of education. This subsequently puts young girls at grave risk of domestic and sexual violence, which hurts their physical and mental health. Studies (UNICEF, 2017; Barnfonden, 2021) have also shown links between droughts, floods, and increased child marriages.

Women’s voices need an audience and action.

Atela et al. (2018) argue that low education levels and structural exclusion from land, capital, markets, and new technologies limit women entrepreneurs in Kenya’s semi-arid lands (SALs) to limited livelihood activities and expose them to climate risks. These factors also determine how well women can build resilience and hinder their agency in decision-making. The underrepresentation of women hinders climate-responsive planning, policymaking, and implementation. Women entrepreneurs’ voices, aspirations, and capabilities must find clear articulation in public policy, legislative, and investment domains.

Research has shown that women entrepreneurs know livelihood needs, assets, opportunities, and stressors, which enable them to design and operate MSMEs that respond to households’ livelihood and adaptation needs (Horrell & Krishnan, 2007). Female-led MSMEs remain underutilized at the societal level in developing adaptation and resilience strategies.

As per the available data (FAO, 2011; UNFCCC, 2023), “if rural women had equal access to agricultural resources as men, yields could increase by 20–30%, and the overall number of hungry people worldwide could be reduced by 12-17%.” Women are also the first responders to any climate change disaster, especially with their increased role as caregivers at household-level behavioral changes and planning. They contribute to recovery after a climate change event as they meet the early recovery needs of their families and strengthen community building. However, we should not place the entire responsibility of responding to climate change on women, the “feminization of responsibility,” as also discussed by Wright, G. (2023).

In this respect, we can mitigate or adapt to climate change impacts through women’s involvement in community-level planning. We can build stronger, more resilient communities that are better equipped to face climate change’s challenges. Women’s empowerment may lead to better climate solutions. Policymakers and development practitioners must engage both male and female farmers to confront climate vulnerability and enhance their capacity to cope with climatic stresses for any farm-level adaptation.

[1] A dowry is a custom practiced in South Asia where a gift of substantial monetary value is given from the bride’s family to the groom upon marriage. The practice is prohibited in India as per the  Dowry Prohibition Act of 1961, yet continues to be practiced widely.

The role of capital in unlocking growth for MSEs through group-based informal financial services in Africa

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Cash-in and cash-out (CICO) agent use cases: Opportunities for diversification

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In developing countries, such as India, Kenya, Bangladesh, and Indonesia, cash-in and cash-out (CICO) agents encounter sustainability challenges. These challenges arise from stiff competition, reduced commissions, and low margins from user-initiated digital financial service (DFS) transactions. MSC recommends several solutions to foster agent sustainability. These include evaluation of agent willingness, mobility, technical and soft skills, digital savviness, financial sustainability, ability to identify potential customers, and ecosystem support during the selection of use cases. The implementation of these use cases will help providers drive the financial sustainability of agents and, consequently, promote financial inclusion among low- and middle-income customers.