How to Improve Liquidity Management for Agents Serving Small Informal Groups and Savers

When financial service providers (FSPs) want to offer financial services to informal savings mechanisms (ISMs) such as savings collectors and savings groups in rural or peri-urban areas, they rely on agents—either their own or external—to act as "liquidity cashiers". These agents often need to be supported to maintain working levels of cash and e-money, if they are to deliver the intended value to the ISMs. This is what Savings at the Frontier (SatF) and its nine partner FSPs from Ghana, Tanzania and Zambia, discovered in their efforts to link up with ISMs.

This 'how-to' note explains why efficient agent liquidity management is important. It looks at a range of tested practices in agent liquidity management that the SatF program and its partners have gathered since the start of the project, as well as practices employed by other FSPs, and concludes by considering whether FSPs are better off outsourcing agent liquidity management.