From Nigeria to Senegal to Kenya, African banks are increasingly shifting their retail services to third party networks.
In June 2020, Nigeria's MTN Momo announced a partnership with Access Bank to allow its Momo Agents (180,000 as of 2020) to provide banking services to the Access Bank customers. The partnership came on the heels of Access bank's acquisition of Diamond Bank Nigeria in 2019, making it Nigeria's largest bank by customer base. This leading position came with significant pressure on its branch network across the country, given that Access Bank did not adopt all of Diamond Bank's branches across the country.
In Senegal, Manko, a subsidiary of Société Générale, is pioneering a new agency banking-as-a-service model. In a previous article, I described Manko as mobile money agents on wheels. Manko staff ride with motorcycles across local communities in Senegal, creating accounts, taking deposits and performing other banking services for customers. Société Générale initially set up Manko as the agent network of its mobile money service, Yup.
In Kenya, Inclusion Times reported today that Kenyan Agency Banking Startup Tanda Secured funding to expand across East Africa. To date, Tanda supports 58 banks and SACCOs, four telecoms, 18 billers, 12,000 merchants and agents and has served over 300,000 unique customers, all of which have processed millions of transactions.
It is unknown if other banks in Africa will fully adopt this model to slim down operations and reach the unbanked/underserved. Most importantly, it is unknown how this new model will sustain the agency business, given the increasing digital payments' growth in Africa.