In February, 2014 Liberia’s Trust Savings and Credit Union (TSCU) had been open less than a year and had fewer than 400 members. The credit union was created by the World Council of Credit Unions (WOCCU) in collaboration with the local community as part of a larger project, the MicroLead Liberia Program. Its goal? To build and develop four regional credit unions throughout Liberia with funding from the United Nations Capital Development Fund (UNCDF), bringing much needed financial services to rural areas.

Even after receiving technical assistance from WOCCU, TSCU was still struggling to develop its client base and loan operations. But when a local telecom operator offered TSCU the chance to become a mobile money agent, they leapt at the opportunity.

Becoming an agent is one of the simpler methods credit unions and MFIs can utilize to enter the digital finance arena.  In this model, the financial service provider (FSP) acts as an agent for a digital financial service provider (often an MNO) and offers the provider’s products and services through the FSP’s own branch network.

Not only could acting as an agent provide an easy entry into mobile banking, but more importantly, it could give TSCU the chance to build relationships with new potential members. For any financial institution holding onto other people’s money, trust is an issue. But in Liberia, a country torn by civil war, and more recently devastated by the Ebola outbreak, the trust-building challenge was even greater. Many rural Liberians might have been unsure about putting money in a credit union, but they knew they wanted the ease and convenience of mobile banking.

By acting as a mobile money agent, TSCU was able to:

  • Earn additional revenue;
  • Expand outreach by converting mobile money users into clients;
  • Retain existing members with the new product offerings; and
  • Differentiate itself from its competitors.

Digital finance solutions provided by MFIs and credit unions reduce transaction and transportation costs for the poor living in remote rural area. “Before the credit union came here we used to pay mobile money fees and pay extra money again to the boys who [were] doing the mobile money before we got our money. They use[d] to charge us double for our own money. And sometimes you come, and if they don’t want [to] give you money, they will tell you that the service is not working. But for Trust [TSCU], anytime I come, I get my money and get it correct,” said Michael Tozaye, a Liberian timberman businessman.

TSCU’s path to agent banking was recently detailed in the UNCDF/MicroLead Digital Finance Toolkit #2: Be an Agent.