NBS Bank, Malawi

The Pafupi Agent Network

NBS Bank tried numerous ways to reach the large, unbanked population in Malawi, but kept running into obstacles. By partnering with Women’s World Banking, investing in research — including focus groups conducted in the local language — and data analysis, and adopting a client-centric approach, it found success with the Pafupi Agent Network.

In 2008, the FinScope report indicated that only 19 percent of the adult population of Malawi was served by a formal banking institution. That meant 81 percent was unbanked.

Recognizing an opportunity, NBS tried several approaches to reaching these potential customers, including deploying mobile “Banks-on-Wheels” vans across the country. The strategy backfired, resulting in long queues, unexplained waiting times, and overcrowded banking halls when the vans weren’t available.

NBS came to the realization that it needed to develop a new product that would be compelling and attractive enough to serve its target customers where they lived.

“… the questions we sought to answer were: How can we offer a form of banking services to this unbanked segment in a cost-effective way… How do we get to them with some form of valid propositions…?”

-Mercus Chigoga, Head of Personal and Business Banking, NBS

It knew that such a product could come with considerable costs, requiring fundamental shifts in its business model.

Understanding the Customer

NBS decided to reach out and listen to its customers to learn about the challenges they were facing and to better understand their financial needs.

Partnering for Success

In 2012, NBS partnered with Women’s World Banking (WWB) and successfully applied for funding from UNCDF’s MicroLead Expansion Programme (MLEP).

With WWB, NBS sought first to understand the needs of the customers targeted by the Bank — that is, women and customers in rural areas. WWB and NBS understood that financial service providers must first know the key attributes that differentiate the low-income customer segments from other segments in order to be able to provide financial products that are relevant to them.

Through their research, they began to understand their customers, their motivation, and their need for banking services. This extensive research process culminated in the design of a product that met the identified needs of the target population for savings and financial planning.

Listening to the Customer

The NBS-WWB team employed a rigorous research methodology to understand the customer. It conducted 14 focus group sessions in Chichewa — the language spoken by over 65 percent of Malawi’s population — to overcome literacy challenges.

Researchers confirmed that Malawian women were overwhelmingly the financial managers and savers in their households. But they faced challenges accessing formal banking products, and resorted to informal tools like village banking, savings groups, and saving at home.

Findings from the research identified many challenges, including physical, regulatory, emotional, and financial barriers.

“… paying MK12,500 to operate an account would have meant that I am not able to own an account …”

-Stand Ajida, Kachere, Malawi

Defining the Customer

The research allowed NBS-WWB to better define the customer segments they needed to target: rural subsistence farmers, rural cooperative farmers, and urban entrepreneurs.

Developing a product that met the varying needs of the customer groups, and at the same time addressed the challenges, would require NBS to radically rethink its business model in these key areas:

  • Product design;
  • Operating model; and
  • Marketing and financial education

Product Design

NBS embarked on a product design process to specifically address the challenges that had been identified through the research and customer engagement process. A cross-functional team considered not only operational aspects of product design, but also how delivery models could address the distance and cost issues that customers had identified.

Regulatory solutions: They approached the regulator with a proposal to relax regulations for lower-income earners. Again, they did their research.

“By sharing experiences from successful models implemented in other countries, especially in Kenya and Tanzania, we were able to persuade the regulator to consider our propositions … one of which was the introduction of a tiered-documentation requirement for account opening and account limits …”

-Mercus Chigoga, Head of Personal and Business Banking, NBS

Affordability solutions: The team reorganized the bank cost structure to introduce a one-time account opening fee, which included a debit card, and eliminated industry-norm monthly ledger fees.

Incentives: It developed incentives like prizes and interest payments to be paid on minimum balances.

The Product: Pafupi 

Developed in 2014, NBS launched a tailored savings product prototype targeting low-income women and rural customers. NBS called it Pafupi, or “closer” in Chichewa.

Low-cost and efficient, requiring either a voters’ ID or a letter from a chief as a means of identification, Pafupi took into consideration many of the insights obtained from customers.

The Delivery Method: Pafupi Agent Network

Along with the Pafupi prototype, NBS tested several different delivery models — including partnerships with Malawi Post and Airtel — before landing on the model that seemed to best meet the needs of its target customer. It continued to test and listen to the customers, as well as seek internal buy-in to ensure success.

Mobile sales agents, known as “Friends of Pafupi,” brought banking closer to the community, often opening accounts in the comfort of the customers’ homes. In addition to numerous incentives to reward agents’ performance, they were trained in the Pafupi sales pitch: it is close to you, it is secure, and your money will grow.

“I am a nurse by profession … I did not know anything about banking before now, [but] with Pafupi I think I am now a banker …”

-Mary Mateyu, Pafupi agent and owner of Rhodas Drug Store

Eventually, NBS fine-tuned and expanded the agent model into the Pafupi Agent Network, providing security, trustworthiness, accessibility, and a permanent home for their banking services. Local shop owners, familiar and trusted faces in their communities, were the preferred partners, and were selected from a rigorous banking agent recruitment process.

“With shop owners acting as banks, the concept of banking is demystified. The same person you go to for grocery supplies is able to provide banking services to you.”

-Ntaja Ntandaza, Head of Agency Banking, NBS

Internal Buy-In

Although NBS had made a business decision to serve the low-income market, it still needed stakeholder acceptance as the bank transformed its business model to serve rural clients. Strategic patience was critical to make the required investments and commitments to ensure success.

Mercus Chigoga, Head of Personal and Business Banking, was assigned to oversee the development of Pafupi, and a team was put in place to track gender performance on account ownership.

The decision to start with a pilot of the prototype allowed for assessment and helped deliver internal buy-in.


Marketing and financial education were critical to the piloting of the program. NBS and WWB engaged a public relations firm to create awareness of the key features of the new product, like the use of debit cards at ATMs and how interest accrues. Female customers were targeted through financial education sessions.

On July 22, 2015, after meticulous planning, research, and analysis, Pafupi was officially launched across Malawi.

More than two years later, there remain challenges — such as low female enrollment, poor internet connection, and customers limiting their card transactions. But the future of Pafupi remains secure. NBS has identified the product as integral to its five-year (2017–2021) strategy. It believes this customer segment is key to delivering sustainable value to the bank through low-cost funds.

NBS recognizes that delivering a product that meets the needs of these unique customers is a long journey, so it invests a lot of time in the field engaging customers and agents to understand product issues and to find innovative means of addressing them.

NBS continues to work and improve by:

  • providing incentives for Pafupi agents;
  • introducing value-added services; and
  • exploring partnerships with microfinance institutions to grow Pafupi.

NBS is intent on making Pafupi profitable. Its success is due to a favourable regulatory environment, a strong technical partnership, donor funding, and a strong focus on providing services that meet customer needs.