Rogue Mobile Money Agents and Black Market SIMs of the DRC: A Barrier to Financial Inclusion

Why is the Agent SIM Black Market a Concern?

Agent, provider, and consumer risks

When agents begin operations without vetting from the DFS provider, the quality of service is affected, the brand of the DFS provider is compromised, and customers are at risk from unscrupulous agents who are not registered or identifiable in the DFS provider database. When agents obtain SIMs illegally, they do not undergo provider KYC checks, contracting, or training. Nor are they monitored and supported by the provider. KYC checks are required by the Central Bank of the Congo DRC, as an essential practice to ensure exposure to risk and fraud are kept to a minimum. The gaps reduce agent (and provider) profitability and add a multitude of risks to the DFS business. As the agent SIM black market grows, the DFS provider loses more and more visibility over the identity of its individual agents, making it harder for providers to ensure the quality of the entire network.

The black market is a phenomenon that must be curtailed.

Agent sustainability

An agent who has not been through the official contracting process is unlikely to have a clear overview of responsibilities and duties. An agent who has not received official training will struggle to serve clients to the high level of quality that DFS providers require, thus damaging the reputation of both the brand and service.

For example, their ability to manage liquidity is likely to be suboptimal due to lack of training and provider support. Lack of liquidity, in turn, limits the agent’s ability to offer services to clients consistently, and thus will limits commissions and earnings potential, likely making the DFS business financially unviable for the agent in question.

Thankfully, some MNOs in the DRC have already started to take measures to address this issue. Some of the measures that providers are currently employing to curtail the “black market” of agent SIMs include:

• Linking the issuance of an agent SIM card to the agent in question, after the agent fulfills official training and contracting requirements
• Deactivating agent SIMs that either have been dormant for a specific time, or whose operational locality does not match with the registered locality
• Driving re-registration of black market SIMs. For example, some DFS providers have communicated to all agents that those working with a SIM card that is not registered in their own name cannot reclaim e-money balances if they lose the SIM card.

Other measures that DFS providers have employed effectively in other markets include:

1. strengthening agent selection and recruitment procedures to ensure that all agents undergo requisite checks and are equipped to offer services,
2. regular audits of agent outlets to ensure that all operational agents have been registered,
3. withholding commissions for agent transactions on unregistered SIMs,
4. mystery shopping and feedback from customers who use agent outlets to ensure quality of service and identify unscrupulous agents.

Quality vs. Quantity of Agent Bankers

Finding the right balance between the quantity of agents on the ground and the quality of agents is tricky. Yet it is crucial for a DFS provider to get this right if they are to minimize risks and ensure that the service is sustainable. We believe that three major factors would help ensure a better balance between the quantity and quality of DFS agents on the ground, while also working to eradicate the black market itself. These are:

• investment in human resources to monitor and support agents,
• improved training programs,
• the implementation of stricter agent selection criteria and processes.

As our research clearly shows, the black market for agent SIMs in the DRC presents significant risks to providers and is likely to stifle the long-term growth of DFS in the country.