Sarah Bochaberi Ong'era, Job Omagwa


The Central Bank of Kenya recognizes the financial inclusion challenges which the country faces. These include the cost of financial services and the distance to bank branches in remote areas. Part of their approach to addressing these challenges is to address the delivery channel costs through increased use of agent banking. Since agency banking transactions cost far less than transactions at the branch teller, banks can make a profit handling even small money transfers and payments. Nonetheless, despite the adoption of agency banking in commercial banks, the performance of banks has been declining. The study sought to examine the role of agency banking on performance of commercial banks. The study was conducted in the month of July, 2016 and focused on selected commercial banks, that is, Equity bank Kenya limited, Co-operative bank of Kenya limited, KCB bank Kenya Limited and Family bank Kenya limited. The researcher used descriptive research design. The study adopted purposive sampling whereby respondents targeted provided the information that was required. The study used both primary and secondary data. Primary data was collected using a questionnaire, while secondary data was collected from the audited financial statements for over a period of 5 years (2011-2015). Statistical Package for Social Sciences (SPSS) version 22) was used for purposes of analysis. Data was analyzed using descriptive statistics (Means, percentages and standard deviation) as well as regression analysis. This study found that agency banking influences the financial performances of the four commercial banks in Kenya. The study also concludes that agency banking improves the efficiency of service delivery and increases the accessibility of financial service to many customers in remote areas. The management of commercial banking should increase their customer‚s awareness on the benefits and safety of using agency banking. This can be done though print and mass media advertisements.

Full Text:



Amita, R. (2015). Is Financial Innovations influence on Financial Development? International Journal of Business Management, 2(1), 771-789.

Elie-Dit-Cosaque, C., Pallud, J., & Kalika, M. (2011). The Influence of Individual, Contextual, and Social Factors on Perceived Behavioral Control of Information Technology: A Field Theory Approach. Journal of Management Information Systems, 28(3), 201-234.

Gichungu, Z.N. & Oloko, M.A. (2015). Relationship between Bank Innovations and Financial Performance of Commercial Banks in Kenya. International Journal of Education and Research, 3(5), 443-456.

Gwama, M. (2014). Explaining weak financial development in Africa. African Review of Economics and Finance, 6(2), 69‚87.

Hao, J. & Hunter, W.C. (2009). A Test of the Impact of Financial Innovation on Economic Growth. Managerial Finance, 23(11), 64 ‚ 78.

Kablan, S. (2010). Banking Efficiency and Financial Development in Sub-Saharan Africa. Retrieved from

Kenyoru, J.O. (2013). Effect of Financial Innovations on Financial Deepening in Kenya. Retrieved from

Kero, A. (2013). Banks‚ risk taking, financial innovation and macroeconomic risk. Quarterly Review of Economics & Finance, 53(2), 112-124.

King‚ang‚ai, P.M. & Kigabo, T. (2016). Effect of Agency Banking On Financial Performance of Commercial Banks in Rwanda. A Study of Four Commercial Banks in Rwanda. European Journal of Business and Social Sciences, 5(1), 181 ‚ 201.

Kiprop, M.J., Kalio, A. & Kiprop, S. (2015). Effect of Financial Development on Economic Growth in Kenya: Evidence from Time Series Analysis. European Journal of Business and Social Sciences, 3(11), 62 ‚ 78.

Muiruri, J.K. & Ngari, J.M. (2014). Effects of Financial Innovations on the Financial Performance of Commercial Banks in Kenya. International Journal of Humanities and Social Science, 4(7), 23-45.

Munoru, M.K. (2013). Effect of Agency Banking on Financial Inclusion in Kenya. International Journal of Science and Research, 5(10), 121-134.

Ndirangu, D. K. (2013). The effect of agency banking on financial performance of commercial banks in Kenya. Retrieved from

Ndwiga, J. M. (2013). Effect of agency banking on financial performance of Commercial Banks in Kenya. Retrieved from


  • There are currently no refbacks.