Agency Banking and Financial Performance of Kenya’s Listed Commercial Banks
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Date
2024-06
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Publisher
Kenyatta University
Abstract
Gone are the days when each banking exchange required a visit to the banking office. Money
transactions have changed in form, and banks have contracted their activities to third-parties to
avoid the cost associated with opening up new. Kenyan keeping money division has been quick to
grasp the progressions, and in the course of the most recent seven years, a bunch of operators have
so far taken up the choice. Organization banking includes various advances together for the moneyrelated establishments to monitor the exchanges done by the retail outlet. This investigation is
based on past trends whose objective is to assess agents investing in the country’s business banks.
This research embraced a descriptive research plan where the primary target was 18 banks in
Kenya that offer banking services through Agency Banking. The research was conducted in order
to close significant gaps in knowledge on this topic, especially with regard to the Kenyan agency
banking sector, where no comprehensive attempts have been made to understand this aspect of the
office betting on the execution of bank experts' business. Particular goals were to explore the
impact of agency banking organization, agency banking networking, maintenance cost required,
and impact of monetary openness related to office saving money on the budgetary performance of
business banks in Kenya. The research accordingly focused on every single business bank offering
agency banking in Kenya, which was eighteen as of December 2016. The research was a census
survey meaning that data was collected from all the 18 Commercial banks offering agency banking
in Kenya though individuals being interrogated. Essentially, both primary and secondary
information was used in the research. Essential information was gathered through blended modes
of data collection where face-to-face interviewing and self-completion techniques were used.
CBK's annual report and supervisory reports were also used to obtain further information to
determine the total number of operators registered and the value-based esteem led by the
specialists. To test the legitimacy and unwavering quality of the instrument, a pilot research was
likewise directed. Quantitative information gathered was investigated by the utilization of
descriptive statistics using SPSS and presented through rates, standard deviations and frequencies.
The findings were presented using relevant bar charts, pie graphs, diagrams, and in prose-form.
Content Analysis was used to test information that is subjective or part of the information gathered
from the open-ended inquiries. The research shows that the highest correlation was between
agency banking network and agency banking maintenance cost, and agency banking maintenance
cost and financial performance, as well as the financial performance and agency banking network.
At the 0.01 level, all of these associations were significant and positive. R-squared of 0.626 and a
standard error of 0.719 were reported. The study concludes that Kenya’s listed commercial banks'
financial performance was significantly improved through agency banking. According to the
report, commercial banks should completely embrace agency banking by using better security
information technologies to increase client reliability. The report also suggests that the Central
Bank should think about developing a clear agency banking regulatory strategy that establishes a
common platform for all financial institutions. By doing this, fair market completion can be
improved. Financial institutions would be prevented from abusing their customers
Description
A Research Project Submitted to the School of Business, Economics and Tourism in Partial Fulfillment of The Requirements for the Award of Degree of Master of Business Administration (Finance) of Kenyatta University. June 2024
Supervisor
Mr James M. Muturi
Department of Accounting and Finance
Kenyatta University