Assessing factors affecting agents operating agent banking in Kenya
Rutere, Jenniffer Kathambi
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The National Financial Access Survey of 2009 shows that 32% of Kenya's bankable population remains totally outside the orbit of financial services and many more being served by the informal financial system (CBK, 2009). The Finance Bill, 2009 sought to introduce agent banking through which institutions would be allowed to conduct banking business through third party agents duly approved by the Central Bank. The CBK had laid down guidelines on agent banking to increase the financial services outreach and to promote financial inclusion to the un-banked and under-banked population without risking the safety and soundness of the banking system. Despite the enormous role played by the agents, they were affected by various factors that acted as impediment to their smooth and effective operations. Some of these factors included; network breakdown, illiteracy of the users, digital connectivity, security concerns, inadequate float and underdeveloped infrastructure among others. The study was to be conducted to analyze the specific factors that affected the agents operations and to what extent they affected the service in general and how they could be mitigated in order to have effective and smooth agent banking. The general objective of the study was to establish the factors affecting the operations of agent banking agents in Kenya, as well as effects of technological, government regulations, user perception factors and infrastructure factors that affected the operations of agent banking agents. The findings of this study were to be used for agent banking agents, mobile telephone operators interested in increasing mobile payments usage, commercial banks and micro finance institutions. The study was conducted within Nairobi Central Business District which is the capital city of Kenya and primary data collection method was used. The study targeted all banking agents in Nairobi city centre since they were about 34 agents who were operational within CBD. The questionnaire was used to collect data from the agents. The data from the field was analyzed using both qualitative and quantitative techniques. Before the actual data analysis, the gathered data was validated, edited and then coded. The coded data was entered into the computer software; statistical package for social sciences. Descriptive statistics such as percentages, frequencies and cross tabulation was used where necessary to analyze data. The research findings were presented using frequency tables, percentages, cross tabulation, pie charts and bar graphs. The study found that agent banking was gaining popularity though factors such as road Network as well as system network needed to be improved to reduce system breakdown. The safety of transporting cash was rated fair as agents were not comfortable transporting Large amounts of cash. Majority were not familiar with all government regulations as well As their personal view on wireless transactions affected their usage.