Monthly customer feedback changed how newly appointed financial agents handled transactions in rural Sierra Leone, according to a field experiment covering 195 communities. Agents who received feedback were less likely to allow a third person to be present during a transaction and more likely to report changing their practices.
The October working paper by Francis Annan and Seth Garz examines a question facing payment providers expanding into underserved markets: does giving people a nearby way to use digital finance also make the service trustworthy and attractive enough to use?
The researchers worked with existing village savings and loan associations, or VSLAs, which pool members’ savings and make small loans. Some groups were helped to become agents for Orange Money and GT Bank. A second, independently randomized intervention added a regular customer evaluation process.
The results are from one rural setting and the paper has not yet been peer reviewed. They do not establish that the same feedback system will work in every payment network.
Access rose, but routine usage needed more
A mobile-money agent connects a digital account to cash. A customer can visit an agent to deposit or withdraw money without traveling to a bank branch. The agent must have enough cash or digital balance available for the transaction, and customers must be willing to trust the service.
In the experiment, one savings group in each treated community was enrolled as a digital-finance agent and represented by two local financial champions. According to the authors’ full October paper, provider entry alone increased formal account ownership by 5.2 percentage points, or 23% relative to the control group.
Deposits into digital accounts and digital savings increased, but the researchers did not detect a corresponding change in peer-to-peer transfers, cash withdrawals or the frequency and value of transactions among those already transacting. Opening an account and using it regularly are separate decisions.
Our earlier coverage of mobile-money agent contracts in Ghana examined a different question, how payment incentives affected agent and provider returns. The Sierra Leone trial looks at customer experience after agents enter a market.
Privacy and responsiveness improved
In feedback communities, customers assessed agents monthly on fees, privacy, transparency, reliability and satisfaction. The evaluations were digitized and shared with agents and communities at gatherings.
Agents in the combined entry-and-feedback group were 13.2 percentage points less likely than agents in the entry-only group to permit a third person to be present during a transaction. They were also 20.5 percentage points more likely to report making changes in response to feedback. The comparison group’s reported rate was 24%.
The 20.5-point result measures reported changes in response to feedback. It is not a general percentage increase in service quality, and the study does not identify one specific change as the cause of every other outcome.
Compared with the control group, account ownership in communities receiving both interventions increased by 9.1 percentage points and mobile-money use rose by 10.4 points. The paper reports higher transaction values among households that transacted, as well as greater digitization of savings contributions and higher group income among upgraded associations.
What providers can take from the trial
For a business building an agent network, customer access depends on more than signing up local outlets. Clear fees, reliable cash availability, privacy and a way to report problems can affect whether a customer returns.
Feedback also needs a route to action. A provider collecting complaints without telling local agents what went wrong, or giving customers a way to see a response, may not reproduce the process tested in the study.
The experiment found no effect on overall poverty. The researchers also note that the savings-group result on default concerns delayed or missing member contributions, not repayment of loans. Longer-term effects, costs at scale and results in more competitive markets remain questions for further research.
