CSP Survey 16 Aug

7/31/2019 CSP Survey 16 Aug

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Functionality and Sustainability of

customer service points a survey

based study

College of Agricultural Banking incollaboration with CGAP

N.Srinivasan, L.M.Ganesan, Aimthy Thoumoung

16 August 2012, CAB, RBI, Pune.

Views are that of the authors and do not necessarily reflect

the views of CAB, RBI or CGAP


2/24

Government & Policy

Track Financial Inclusionpolicy outcomes

Balance quality alongsidequantitative targets

Obtain and assess market

feedback on suitability ofpolicy guidelines

Providers & Delivery

Identify key risks

Articulate key service levelindicators

Cull poor practices and

build on positives

Survey Objectives

2


3/24

3

CSP Survey: National Sample

CSP Sample

Sought 1,030 Dec 11 bank listed

CSPs

Reached & surveyed 860 CSPs

that work for:

8 Public Sector Banks

2 Regional Rural Banks

2 Private Banks

10 BC Companies*Note: added 241 customer surveys to double check

some CSP responses

214 102

14

2

92

98

78

70

68

76

46

* BC companies are third party firms that manage networks of CSPs. 148 of the CSPs

surveyed were individuals contracted directly by banks and not through BCcompanies.


4/24


5/24

Fixed

Point

70%

Moving

Point30%

CSP Survey: National Snapshot

#

of

CSPs

5

FI Village

69%

Non-FI

Village

18%

Urban

13%

Recent fast expansion means many new

CSPs. Survey could not estimate CSP churn

which requires data from Banks and BC

Companies.

FIPs have

accelerated the

roll-out of CSPs

positive impact of

policy on networkexpansion

6%

20%

36%31%

5%1% 1% 1%0

50

100

150

200

250

300

350

60

Length of time operating as CSPs

Months in operation


6/24

0

10

20

30

40

50

UP Raj Maha Guj Bihar WB

AssamTrip AP

TNDelhi

4 3

209

514

0 0

43 47

4

Engagement of Women CSPs (%)

0

50

100

UP RajMaha Guj

Bihar WBAssam Trip

APTN

Delhi

55

12

8162

26 46

71

5035

50

93

CSPs having other income sources (%)

51% CSPs depend solely

on this job. In some states more CSPs had other

incomes

Barring AP, TN and Maha

women CSPs are scarce


7/24

7

Are Customers Receiving Value?

Reliability

Availability

Ability toTransact

Convenience

Fixed point

Moving point

Choice of CSP

Efficiency

Accountopening

Accountactivation

Products

Payments

Savings

Insurance

Credit

Part

I


8/24

Availability 93% of fixed point CSPs available in the specified

location

In UP it was 81% - on in five were not available

One in four CSPs not ready for transactions

0

20

40

60

80

100

UPMaha Guj

Bihar WBAssam AP

TN Delhi Total

8496 95

50

8089

74

33

98

75


9/24

Convenience

70% CSPs were in a fixed location certaintyof service

30% moving CSPs provided door-step services,

but low frequency 71% work for more than 5 days in a week

78% made alternate arrangement if they were

unavailable 35% CSPs state their customers cannot go to

other CSPs of same BC/bank.


10/24

10

EFFICIENCY account opening is quick. But

activation of accounts takes time

Part

I

0%

5%

10%

15%

20%

25%

30%

35%

40%

1-5 5-10 10-15 15-20 20-25 25-30 30-60 60-90 >90

Account Opening Time - MINUTES

CSPs' Perception Customers' Perception%

Of

respondent

s

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

1 2 4 7 15 30 45 60 >60

Account Activation Time - DAYS

CSPs' Perception

Customers' Perception

Activation beyond 7 days

indicative of weak back-end

processes

77% CSPs in Rajasthan report

delay of more than a month

98% in Bihar report

activation in 15 days or less

%

Of

respondents


11/24


12/24

Variability in Product offering

0

10

20

30

40

50

60

70

80

90

100

Savings P2P

remittance

G2P

payment

Credit Insurance Pension

all rural

urban

More remittances in urban locations and more G2P in rural

locations Rural CSPs better in insurance, pensions and credit


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13

Are CSPs likely to continue

Income

Earnings from CSPwork

Liquidity Costs

Liquidity held byCSPs

Balance withOther Work

Sole Income Partial Income &

Other Activities

BC/BankSupport

Training Visits from BC/

Bank

Timelines of pay

Part

II


14/24

0

20

40

2332

16 85 6 4 2 1 0 2 1

number of transactions per day

% of CSPs

010

2030

40

UP

Raj

Maha

Guj

Bihar

WB

Assam

Trip

AP

TN

Delhi

29

98

1823

1211

31

8

322

No of txns per day state-wise

Transaction load

55% had 10 or less txnsa day. TN, AP, Maha &

Raj CSPs had less

than 10 txns a day - low

income prospects


15/24

0

5,000

10,000

15,000

20,000

UP Raj Maha Guj Bihar WB Assam Trip AP TN Delhi

1325 2566 3156 9300 3178 1350 9506000

2643 2375 5917

6786 66258375

17500

85009500 9000 9000

4679 4739

9400

Actual revenue

Expected revenue

RevenuesMedian revenue Rs 2735 pm. (moving point Rs 1475,

Fixed point Rs 3210) Urban CSPs had double the income

of rural CSPs.


16/24

0

20

40

60

80

100

Proportion CSPs dissatisfied with revenue

Deficit in revenue as % of expectation

CSPs dissatisfied with revenues. Dissatisfaction high in several

states and disproportionate to extent of shortfall in expected

revenues


17/24

Averagebalance heldon a

weekday

% of CSPsholding

Cash E-

moneyRs 1000 and

less

3 1

Upto Rs10000

23 20

Rs10000 to25000

8 8

More than

Rs 25000

27 20

Not sure 37 51

Most CSPs keep small amounts of liquidity and have limited ability to

respond quickly to immediate client needs. Low liquidity limits CSP costs

but may inhibit client uptake of more products.

Liquidity management


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19/24

19

Dependence: less than half of CSPs earn incomeelsewhere; raises regulatory and labor union questions

Part

II

Little other

work

CSP work as sole income source raises questions:

Bank unions may question CSP employment status

Business Correspondent design was to leverage

existing organizations

Only 5% of CSPs are sourced by large

corporates such as fast-moving-consumer goods

(FMCG) companies or mobile operators


20/24

Constraints faced by CSPs in different states(% of CSPs reporting constraints)

UP Raj Mah Guj Bih WB Ass Trip A P TN Del

Overall 71 95 79 91 97 90 64 50 40 54 65inance/cash

related 19 83 46 81 49 43 64 50 19 31 26Tech

related 39 88 41 79 60 58 50 0 17 28 52Cards

related 12 87 16 38 15 42 43 0 3 31 0

Trust ofvillagers 9 72 17 26 19 14 57 0 5 22 0Mktng

supportof bank 9 80 33 68 67 49 64 0 4 3 13

Delay in payment of remuneration, inadequate support from

banks/BCs, limited training will erode motivation continue


21/24

Training 10% never received training (89/860)

Visits from BC/Bank 18% no visit in > 1month (158/860)

40% no visit in > 1week (350/860)

Timeliness ofPayment 50% are paid slowly (428/860)9% pay has not arrived (77/860)

Opinions on Support 36% say its not adequate (313/860)

Quality of Support to BCs needs improvement


22/24

Summary of findings

One out of four non-operational

Transaction levels, revenue, product variety seeminadequate

Urban CSPs comparatively better off

CSPs continue on account of social factors and sunk

investments Extent of technology problems is a matter of concern

Many Banks yet to figure out the best role for CSPs arethey cash points or extension of the branch?

CSPs not satisfied with level of support from Banks and BCs are risks and problems pushed down to the CSPs?

CSPs in Rajasthan and Tamil Nadu have significantproblems; West Bengal CSPs also face many difficulties

Gujarat and Delhi CSP have better revenues


23/24

Some suggestions

Policy review on CSPs exclusively in agent banking as alsomoving point CSPs

A business case is yet to be proven at any level - Banksshould strategically use CSPs as part of their businessexpansion and include CSP outputs in branch plans

Improve CSP remuneration through expansion of role,more products and marketing support for increased txns

Deal with technology issues on a war footing

Hiring and training practices should improve Study the better performing states to develop improved

models for other states

Develop a robust monitoring system both internal to

banks and at RBI level with feedback from the field


24/24

THANKS

This presentation reflects the interim stage of the study

findings. The final report is likely to be released shortly

CSP Survey 16 Aug

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