The effectiveness of agent banking services in Uganda

Abstract

This study established the effectiveness of agent banking services in Uganda with a case study of wandegeya Equity bank branch. The study objectives included the following; to evaluate the effectiveness of agent banking services at equity bank wandegeya, to establish the challenges limiting agent banking services and to establish the ways of enhancing deposit mobilization in Equity bank wandegeya branch. A cross-sectional research design was employed. Both quantitative and qualitative approaches were used in the study. The population of the study was 100 from which a sample of 65 was selected. Purposive sampling was used as the sampling technique in order to provide important information that cannot be obtained from other choices. Both primary and secondary data were employed. Data was collected using the questionnaire instrument and the interview guide. Data collected was analyzed using SPSS Version 16.0 and presented in form of tables. The study revealed that effectiveness of agent banking services in improving operational efficiency in Equity Bank wandegeya branch can be described as a way of lowering the cost of doing business by both the bank and also on the side of the customers. The challenges limiting effectiveness of agent banking services in improving operational efficiency at Equity bank wandegeya branch were based on the fact that agents don’t handle large transactions, risk of customer data leakage, instability of the agent banking network at the agent banking centres and a long time while waiting to be served at the agent centres because of the unstable network. The strategies likely to improve effectiveness of agent banking services in Equity Bank wandegeya branch were explained as availing the agent bankers with tools such as point of sale devices for the smooth running of the business. The study concluded that an improvement in technology, by stabilizing the network and enabling the agents to raise the transaction limits will lead to improved operational efficiency in Equity Bank wandegeya branch hence addressing such issues by management will make agent banking more effective. The findings also led to a conclusion that sensitization of customers about the services offered by agent banking centres can raise the confidence of the clients in the service hence open up to using those same services other than flooding the banking hall for even small transactions for example paying utilities. The study findings further concluded that much as one of the aims of rolling out agent banking was to increase outreach and access to the bank services, this has not been realized as most of the agent banking centers are concentrated in towns and not in the rural out skirts of Kampala town hence this needs to be addressed in order to have more improved efficiency in the bank. The study recommends that Equity bank wandegeya branch should increase outreach and access to the bank services by having more agents in the outskirts of town other than have them concentrated only in town where there are a lot of options to choose from.