Effects of Agency Banking on Bank Performance: A Case of Equity Bank Meru Branch, Kenya

Abstract

The purpose of this study was to establish the effects of agency banking on bank performance with a focus of Equity Bank Meru Branch, Kenya. The reason for the selection of Equity Bank was because of its large customer base and because of its growth. The study adopted a descriptive research design and the target population was the eighteen agency bank agents. The study used stratified random sampling to select 11 agents that were used in the study. Both quantitative and qualitative data was collected by use of questionnaires with both open and closed ended questions. Data was analyzed and presented using descriptive statistical tools. The study findings indicated that the general cost such as operations and transactions cost were still high even for agency banking, security measures were in place that is physical security though it needed strengthening, transaction security and customer security were not good and needed improvement and the regulations that were in place for agency banking also needed to be improved. The study made the following recommendations: For agent banking operations to be effective, strong internal control systems should be put in place which should be flexible and be evaluated periodically to increase efficiency and effectiveness; there should also be frequent updates of regulations and policies that guide agency banking and procedures that are used in the banking and agency industry in Kenya. Bankers Association in consultation with the Central Bank of Kenya should carry out frequent audit and research in relationship to agency banking to determine any loopholes and challenges in order to advice the banks accordingly. Also banks should work closely with the agents in order to streamline the systems and processes to help achieve efficiency. The results gathered out of the audit and research will help the banks to keep their agents updated.

Agency Banking In Nigeria: Impact and Impediments

“…Agency banking by deposit banks leverages existing businesses, such as grocery shops, cooperative societies, supermarkets and individuals to render banking services. The key services offered by agency banking include cash deposit, cash withdrawal and bank balance checks (Kirima, 2018). Some agency banks work between 8:00 am and 8:00 pm Monday through Saturday and some hours on Sunday, while deposit banks are open between 8:00 am and 4:00 pm Monday to Friday.…”

Effects of Financial Technology on Operation Costs of Microfinance Institutions in Nairobi County

“…The study concluded that increase in the number of agents of commercial banks lead to their increased financial performance hence there is a positive correlation between the number of agent outlets and financial performance. Karimi (2018) conducted a study to establish the effects of agency banking on bank performance with a focus of Equity Bank Meru Branch, Kenya. The study adopted a descriptive research design and the target population was the eighteen agency bank agents.…”