DELIVERY MODALITY ENHANCEMENT: Building financial cooperation at scale

All financial transactions involve an exchange of something of value (money) for a promise to repay in the future. This makes them different than other market transactions, in which the exchange of money for a good or service of approximately equal value happens immediately.

Due to the uncertainty about future repayment, financial cooperation can only take place in the context of mutual trust and reciprocity between the provider and the client. This is why informal financial services are commonly used––they take place in a high-trust environment.

Because informal financial transaction are conducted face-to-face, trust can be built quickly. Agent banking, on the other hand, divides the transaction value chain between the financial service provider and the agent, and digital banking often involves bringing a third party, the telco, into the chain. Each actor in the chain has only a partial relationship with the client and an arm’s-length relationship with each other. Cooperation in this context is based more on contract than trust, which builds in rigidities that complicate the processes of promotion, client relations, and liquidity management.

Breaking these rigidities is the key to building effective as well as innovative delivery channels.


  • Evaluation of delivery channel options
  • Regulatory analysis and compliance
  • Process mapping
  • Costing and pricing
  • Agent network development


Effective delivery of formal financial services in rural areas can utilize groups, linkages, agents, or digital modalities. However, building a strong and profitable delivery channel is not as simple as adding outlets, agents, point-of-sales devices and ATMs, or developing new services such as mobile apps and internet banking.

The right choice for delivery modality is based on the cost, speed and potential breadth of trust within the transaction value chain needed to facilitate financial cooperation at scale.


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  • Cambodia Solar Unlimited Nationwide (SUN): Vision Fund, Maxima, and Kamworks, 2013-14.
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