Beyond Cash-In, Cash-Out: A New Vision for Business Correspondents in Rural Communities
Business Correspondents (BCs) are a critical link in the financial inclusion chain. For millions in rural areas, BCs are the gateway to formal financial services. Whether it is a pension payout or a micro-insurance premium, these agents bring banking to doorsteps that traditional branches often cannot reach. Yet, the dominant business model for BCs remains narrow—centered almost entirely around Cash-In, Cash-Out (CICO) transactions.
In rural regions such as those in British Columbia, where population density is low and bank branches are scarce, the limitations of this model become even more apparent. Relying solely on high-volume transactions for profitability is unrealistic. The answer lies in shifting from economies of scale to economies of scope—broadening the range of services that BCs offer to deepen their impact and enhance sustainability.
From Breadth, Not Just Volume
While the dream of reaching thousands may be viable in cities, rural agents often work within small, tight-knit communities. Instead of focusing on quantity, BCs can focus on quality—offering diverse services to a smaller, more engaged customer base. By adding micro-loans, insurance products, savings options, and digital payments to their service portfolio, BCs can improve both their earnings and their relevance.
Interestingly, many BCs are already entrepreneurs. Around 90 percent earn most of their income from sources beyond their BC work—running shops, managing small farms, or providing local services. But despite these entrepreneurial instincts, nearly 80 percent of their financial activity still revolves around CICO.
Digital Skills: The New Currency
For BCs to succeed in this expanded role, digital literacy is vital. Training agents to use mobile apps, manage customer data, and offer tech-enabled services ensures efficiency and builds trust. It also aligns rural financial services with the expectations of a digitally savvy customer base.
Technology can also help BCs personalize offerings. With the right tools, agents can understand customer patterns and recommend products that fit individual needs—whether it is a credit line for a farmer or insurance for a local shop owner.
Incentivize, Integrate, Innovate
To encourage BCs to diversify their offerings, the system must work with—not against—their existing livelihoods. Consider the example of a startup that partnered with small rural shops to deliver supplies digitally. Using BCs as local agents, the startup offered delivery discounts and credit lines. Store owners saved time and money, while BCs expanded their role from cash handlers to community solution providers.
Such models show that adding value to what BCs already do is the best way to inspire growth. Offering credit for inventory, integrating financial services with retail, and cross-selling products are practical, scalable ways to increase both reach and revenue.
The Road Ahead
Sustainable financial inclusion in rural areas will not come from CICO alone. It will come from empowering BCs to be more than intermediaries. It will come from training them, supporting them with digital tools, and aligning incentives with their realities.
By investing in this evolution, we can build a new generation of BCs—equipped not only to serve communities but to uplift them. The future of rural finance depends on it.
