A New Agent Model for Branchless Banking in Colombia
This article provides an overview of branchless banking in Colombia in the context of the Government’s strategy to promote financial access through nonbanking correspondents (NBCs).
The article describes the regulatory framework for branchless banking, focusing on recent reforms and types of retailers permitted to act as agents. It examines traditional banking sector’s interest in branchless banking and identifies available platforms for implementation of banking agent networks. The article highlights benefits of branchless banking for Colombian MFIs, and gives an overview of the current network of NBCs in the country.
The article presents a new model where MFIs act as agents of branchless banking services. Implementation of the model would create a new microfinance value chain through a process of scale and inclusion, and enable the poor to access a wider array of banking services. Recommendations include:
- Clear rules of representation to mitigate confusion of clients on roles of banks and NBCs;
- Synergy among all players for achievement of integrated branchless banking solution;
- Expansion of infrastructure and technology to support the model.