🌯 Inclusive FinTech Knowledge Bites [Week #46]
🌯 Inclusive FinTech Knowledge Bites [Week #46]
PalmPay's journey in Nigeria, agent networks distribution of digital agriculture, and door-to-door saleswomen driving Chinese platform growth in Mexico
This week on The Barefoot Economist:
📲 PalmPay's Challenges and Success Factors in Nigeria
👨🏽🌾 Agent networks delivering of digital agriculture services
🛎️ Door-to-door saleswomen selling Chinese platform items
Enjoy your reading!
Hugo Pacheco, The Barefoot Economist
📲 PalmPay's Challenges and Success Factors in Nigeria
PalmPay's approach underlines the importance of localised solutions for improving access to financial services. By focusing on face-to-face interactions, they cater to Nigeria’s vast informal sector, where personal trust and service reliability are paramount. By consistently expanding and improving its system, they ensure that its platform can seamlessly handle high volumes of transactions without the risk of network overload, thus bolstering user confidence in their ability to provide uninterrupted services.
🧠 𝗞𝗲𝘆 𝘁𝗮𝗸𝗲𝗮𝘄𝗮𝘆𝘀
Efficient POS Agent Network: PalmPay's strategic focus on maintaining a reliable POS network with transparent charges and high incentives has made it attractive to agents, enhancing the adoption of its services in areas where cash-based transactions dominate.
Near-Perfect Transaction Success Rate: By building a system capable of achieving a 99.98% transaction success rate, PalmPay assures agents and users of uninterrupted services, even during peak periods.
Advanced Security Measures: Addressing trust concerns with robust KYC, transaction monitoring, AI-driven fraud detection, and two-step authentication reinforces user confidence.
Revenue Diversification: PalmPay’s ability to generate income from multiple streams—merchant fees, CICO (Cash-In Cash-Out), commissions, and selling airtime and data—provides a sustainable business model.
Adaptation to Regulatory and Market Trends: Leveraging the Central Bank of Nigeria's (CBN) cashless policy has been pivotal. Fintechs like PalmPay bridged gaps in financial accessibility, especially during the COVID-19 pandemic and beyond.
Massive Transaction Volumes: Managing $6 billion in monthly transactions and 300 million transactions highlights the scalability and reliability of their infrastructure, designed for over 100 million users.
Future Expansion Plans: PalmPay’s ambitions to extend its reach to other African countries and Southeast Asia align with its goal to solve financial inclusion challenges for the unbanked and underbanked.
🌯 The Barefoot Insight
PalmPay’s success in Nigeria can be better understood by viewing its agent network lifecycle as a dynamic system rather than a one-way pipeline. Unlike traditional agent networks that treat onboarding, activation, and revenue generation as sequential steps, PalmPay embraces a more circular approach, focusing on both agent and customer lifecycles as mutually reinforcing engines of growth and sustainability.
📈 The Growth Engine: Agent Lifecycle with a Customer Lens
PalmPay’s strategy to empower its agents goes beyond basic onboarding and transaction support. In the agent lifecycle, new agents first become aware of PalmPay’s benefits, such as transparent charges and a high transaction success rate, which encourages them to join. Once onboarded and activated, agents start generating revenue through transaction commissions and other services.
This process doesn’t stop at revenue, however. Retaining agents and motivating them to bring new agents into the network through referrals creates a feedback loop that continually expands PalmPay's reach. By investing in retention and referral, PalmPay not only grows its agent base but also fortifies the ecosystem with experienced agents who improve the overall customer experience.💸 The Viability Engine: Customer Lifecycle as a Best Seller Model
On the customer side, PalmPay nurtures a lifecycle that mirrors the agent journey linked with an offline need to access cash. Each new customer first discovers PalmPay through agents or direct marketing. As they engage with the platform’s seamless services, they become activated users. As PalmPay’s customers increase their transactions—whether for bill payments, airtime purchases, or money transfers—the company generates recurring revenue.
Critical to sustaining this growth, however, is customer retention. When customers have positive, consistent experiences with PalmPay agents, they are more likely to stay loyal to the platform and recommend it to others thru community-link and nearby access. Through this cyclical referral process, new use cases and new customer segments are continually introduced into the ecosystem, adding further resilience and scale to the PalmPay model.♻️ The Interplay: Building an Ecosystem of Sustainability
This dual lifecycle model—where agents drive customer growth and customers strengthen the agent network—illustrates why PalmPay has achieved such impressive traction. Each agent not only serves as a revenue channel but also acts as a brand ambassador, fostering trust in an environment where fintech adoption can be met with skepticism. Customers, on the other hand, fuel the viability engine, validating PalmPay’s value proposition and securing the financial foundation for the business.
👨🏽🌾 Leveraging agent networks in Ghana to enhance the delivery of digital agriculture services to farmers
Esoko is leveraging field agents to overcome barriers and scale its digital agricultural services among smallholder farmers in Ghana, particularly addressing issues of low digital literacy, social norms, and limited awareness and trust.
🧠 𝗞𝗲𝘆 𝘁𝗮𝗸𝗲𝗮𝘄𝗮𝘆𝘀
Low Digital Literacy: Despite 113% mobile connectivity penetration (38.95M mobile connections in 2024), digital literacy remains below 30%. This gap hinders farmers' ability to engage effectively with digital platforms.
Social Norms and Gender Barriers: Cultural factors and traditional gender roles exacerbate disparities, with women less likely to adopt Digital Agricultural Services due to limited exposure and decision-making authority.
Field agents bridge gaps in digital literacy, trust, and inclusivity by providing hands-on adequate outreach support and personalised engagement.
Farmer Training: Simplifies the use of DAS, enabling farmers to access relevant agricultural information and financial services.
Building Trust: Agents' on-the-ground presence reassures farmers and strengthens relationships.
Gender Inclusion: Focused interventions foster participation and skill development among women, improving productivity and household income.
Sustainable Adoption: trusted agents help farmers see the long-term value of DAS, boosting retention rates.
🛠️ Operational Strategies
To scale effectively, Esoko employs the following measures:
Agent Monitoring: Real-time tracking of agents' activities ensures accountability and performance optimisation.
Workflow Management: Streamlined processes enhance efficiency in service delivery.
Centralized Information: Integrated platforms improve communication between agents and the central team.
Onboarding Support: Simplified onboarding encourages more agents to join and deliver services effectively.
🌯 The Barefoot Insight
Esoko’s agent-driven approach highlights the untapped potential of last-mile networks in transforming rural economies. Taking inspiration from their model, we turn to an equally innovative solution that blends financial inclusion with rural development expanding beyond access to agri-services to cash operations and sachet loans.
🌾 Sachet Loans and Agri-Distribution via ANMsAt the heart of MiBank’s business model for financial inclusion lies the integration of Rural Sachet Loans and agri-distribution networks, driven by Agent Network Managers (ANMs). These rural champions aggregate supply, enabling:
Access to Working Capital:
Sachet loans—small, flexible loans designed to meet specific farming needs—offer rural communities an affordable lifeline to sustain their agricultural activities and scale productivity.Seamless Agri-Distribution:
Leveraging ANMs to aggregate supply creates efficiencies in delivering essential inputs (seeds, fertilizer, tools) to farmers while improving post-harvest logistics for farm produce.Empowering Local Networks:
By partnering with ANMs who have deep community trust and operational expertise, MiBank fosters a self-sustaining ecosystem that connects farmers to value chains while addressing the challenges of access, affordability, and awareness.
📐 Explore MiBank’s Business Model in Agent Network OS
Want to dive deeper into this innovative model of financial inclusion? Visit MiBank’s Business Model Canvas to see how sachet loans and agri-distribution networks are transforming rural livelihoods.🛎️ A large community of catalogue saleswomen are selling items from the Chinese platform.
The traditional catalogue sales industry in Mexico has a 3.1 million workforce that has faced a decline since some customers decide to buy online from Chinese e-commerce platforms like SHEIN and Temu which offer cheaper items.
🧠 𝗞𝗲𝘆 𝘁𝗮𝗸𝗲𝗮𝘄𝗮𝘆𝘀
Adapting to E-Commerce: Sellers incorporating products from platforms like Shein and Temu are leveraging the affordability and variety of these offerings, enhancing their product portfolios to stay competitive by operating as aggregators.
Payment Innovations: Sellers allow customers with personalised payment links for each customer so they can pay in full or in instalments with either a credit or debit card, bank transfer, or cash deposit. These links are sent through WhatsApp, which keeps sellers from in-person visits and improves payment collections.
Adapting to demographics and customer preferences:
Younger customers are drawn to innovative, budget-friendly products from Chinese platforms.
Older customers often remain loyal to traditional catalogue products, reflecting a generational divide in shopping preferences.
Convenience vs. Trust:
While e-commerce platforms offer convenience, catalog sellers still maintain a loyal customer base through personal relationships, which can be a competitive advantage if nurtured properly. Guidance on product complexities, sharing usage advice, and the option to pay cash to avoid online scams are still valued by some customer segments.Challenges for Sellers: Most catalogue sellers are housewives or have full-time jobs and are drawn to this line of work because of the flexibility it affords them. However many complain about the long hours it takes to pick up merchandise from warehouses, deliver it to clients, and collect cash payments.
🌯 The Barefoot Insight
Below are insights from a human-centred approach to distribution, emphasizing the growing influence of digital and community-based service aggregators. These influencers, driven by technology, are reshaping their offerings to better align with local customer preferences and prioritize convenience.
Traditional catalogue companies: To stay competitive in a changing market, traditional catalogue companies need to modernise their offerings. This could include collaborating with digital platforms or investing in technology-driven solutions to enhance product lines and streamline operations. By embracing innovation, these companies can better meet evolving consumer preferences and maintain their relevance amid digital disruption.E-Commerce Platforms: Online platforms like Shein and Temu have an opportunity to forge formal partnerships with catalog sellers, leveraging the trust and personal relationships these intermediaries have built with customers. Such collaborations could help these platforms expand their reach into local markets while offering sellers access to broader product ranges and improved logistical support.Policy Makers and Local Ecosystems: Governments and community organizations can play a critical role in supporting catalog sellers by providing access to financial literacy programs, digital tools, and streamlined payment systems. These initiatives would empower sellers to adapt more effectively to a digital economy, ensuring their long-term viability and fostering economic inclusion.Technology Providers: There's an opportunity to develop affordable and user-friendly solutions tailored to micro-entrepreneurs in this sector. Innovations in logistics, inventory management, and payment processing could significantly reduce the operational burdens faced by catalogue sellers, enabling them to focus more on customer engagement and sales growth.Whenever You’re Ready to Elevate Your Strategy in Emerging Markets
👉🏽 Weekly Financial Inclusion Insights: Actionable strategies and tech insights curated to help you navigate emerging markets with confidence. Delivered every Saturday.
💡 The Agent Network OS: Access exclusive frameworks and examples to optimise your agent networks and streamline your growth with DIY and business model from emerging market best pratices.
🧠 Personalized Strategy Chat: Get one free strategy call with me to discuss your vision and outline tangible steps for execution.
See You Next Week,
Hugo Pachec