Making Business Correspondence Work – Crossing the Second Break-Even'
This Focus Note charts a path for a business correspondent (BC) to become sustainable and profitable.
The Focus Note states that BCs must cross two independent break-even points for sustained profitability. The first break-even, which is reached when the BC signs up large numbers of villagers and earns enrolment fees from the bank, can be achieved in the first year. The second break-even takes longer and requires a lot of investment. It involves a two-part process that includes:
- Winning customer trust by shaping a sound governance regime for transactions;
- Building impetus by accelerating the scale and scope of product adoption.
Business correspondence can be a profitable business, if the focus is on getting governance right. The BC needs to invest in governance systems, adequately staffed service delivery system, monitoring systems that ensure quality service, adequate incentives for client account use and adequate training and incentives for agents to support clients. Accelerating product adoption would include delivering a profitable suite of services, facilitating local payment options, implementing mobile service delivery in rural areas, effective branding and a client-focused approach.