Factors influencing growth of agency banking in Kenya: the case of Equity bank, Kwale County, Kenya

Abstract

Because of globalization, liberalization, and technological advancement, banks like any other organization faced many challenges. These challenges called for search for suitable strategies to be adopted by organization for growth and survival, thus, agency banking became strategy for banking sector. This project, therefore, was intended to investigate the factors that affect the growth of agency banking in Kenya with specific focus lor KwaleCounty. The project is also trying to address the distinctiveness features of agency banking, the customers as well as the characteristics of banks offering the agency banking services. Banks and Financial related Institutions in the developing world are increasingly deploying the use of payments using agencies to enhance the quality of their financial services and increase growth.

The pace of transformation in the financial sector speeded up with more agency banking businesses realizing the potential of using the agencies in transacting payments in their service delivery. However, there are only a handful of studies on the application of digital technology for success and growth on banking agencies.The study will concentrate with a sample of 100 agencies doing bank focused, bank led and non-bank led transactions engaged in the 3 categories. The samples were taken for the study using stratified and simple random sampling. Data was collected by a simple process of answering the basic questions through the use of a questionnaire that include demographic profiles, characteristics of banking agencies, successes and challenges, being the general factors that influence the growth of agency banking, designed in a closed ended:

The study applies the Theory of Descriptive survey which was extended to include other factors to help us predict success and growth in agency banking. Analyses of the data reveal that convenience of the money transfer technology plus its accessibility, cost, support and security factors are related to behavioral intention to use and actual usage of the payment services by the agency banking micro businesses to enhance their success and growth. The findings revealed security influenced the growth of agency banking in Kenya, distance does not influence the frequency of customer transactions, perceived usefulness influences the growth of agency banking, financial education enhances knowledge, attitude and practice in agency banking and lack of coordination between banking agencies influence the growth of agency banking in Kenya and especially Kwale County. Since the research could not capture the customer satisfaction, then it is recommended that further research to be carried out to establish how customer satisfaction influences the growth of agency banking in Kenya.