Gone are the days when people used to travel long distances for financial or banking services. You can imagine the long queues and the risks involved then. As of 2019, only a paltry 19% of the poor could access banking or financial services in Africa, and Southeast Asia, according to World Bank statistics. Even those considered well of, only 31%-60% were banked. What this meant was that almost 50% had no bank accounts. Financial institutions had to find ways and means of taking their services near to the people. That is how Agency Banking came into play. Thanks to technological advancement.
Nowadays, you do not have to travel but just walk to your financial freedom. Agency bankers are all over the place. When this model of banking was introduced to the Kenyan market in 2010, people had many reservations. The perception was that it was not confidential, secure, and reliable. However, the scenario now is different. They say it is very convenient, secure, and confidential. To know more about Agency Banking, and how it works, continue reading this article.
What Is Agency Banking?
It is a new way of cheaply taking financial services to the common person’s doorstep. Going by the rate of rural folks not accessing banking services, the banks had to reach out to them in a Cheap, friendly, and convenient way. Briefly, Agency Banking is the involvement of a 3rd part entity to provide financial services to customers, on behalf of a licensed banking institution.
The Must-Have Requirements
You must own a business. It should be registered and licensed. It should have been in operation for over a year, conveniently located, and accessible.
Documents: Copies of your National Identity card, licenses, educational certificates, a letter from your religious leader, PIN, business bank statements for the last 6 months, and 2 colored passport-size photos among others.
You will pay an application fee.
Approval: by the Central bank of Kenya.
You must sign the contract.
Insurance Cover: That is proportional to your total investment.
The average Minimum Capital or float should be between 50- 100 Thousand.
Finally, you should pay a down payment for the devices provided by the bank.
Devices to Use
Point of Sale Machine (POS)
Card Reader
Mobile Phone
A Laptop or PC
Staff qualification
The staff should be at least High School leavers, excellent communicators, and technology conversant. Besides, they should be of unquestionable and high moral character among others.
Incentives Offered by the Bank
Offers free training to the owner and agency staff.
24/7 customer service
Regular visits by bank officials
The bank provides stationery.
It also provides Transaction statements on request.
There are trophies given to top performers i.e. equity bank.
Agency Banking Services
Making deposits
Withdrawals
Loan repayments
Account opening
Bills and Utility payments
Balance inquiries
Funds transfers
Account linking
Facilitating checkbook requests
Document custody for onward delivery to the bank among others
Making Money as a Bank Agent
From the commission charged on both Withdraw, and Deposits
Through account opening
Account activation
Registration of mobile banking i.e. Eazzy 24/7
Through Bill payments
Benefits
Enhanced customer satisfaction and service
More income through commissions
More traffic to your business hence more sales
Flexible, accessible, and confidential
Reduced traffic in the banking halls
Reaching more unbanked folks and telling them the gospel of banking
Reduced operational costs to both the bank and agent
Marketing the brand far, and wide
Enables the bank to plan for the future using the data collected from the agents
Challenges
Technological challenges such as system and network failures
Customer challenges, not having proper documentation
Theft risks
Frauds and conning
The emergence of digital apps and mobile banking
Conclusion
Agency banking is considerable talk in Kenya right now. We have agents all over the country serving our populous rural folks. Soon, nobody will have an excuse for not having a bank account or accessing financial services. What has been your experience? Share your opinion with us.
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