An analysis on utilisation of the agency banking channels of Bank of Africa in Mukono District: a case of Bank of Africa in Mukono District

Abstract

The study analysed agency banking channels and financial performance Bank of Africa in Mukono district. It looked at accessibility, low cost of service and increased customer transactions and findings are as below; The three independent variables (increased customer transactions, accessibility of banking services and low cost of service) in this study, explain a variation 75.5% of the financial performance of Bank of Africa as represented by the adjusted R2. This therefore means that other factors not studied in this research contribute 24.5% of the financial performance of Bank of Africa. This shows that there are other factors that influence the financial performance of Bank of Africa. The results indicated that the model was significant since the p -value is 0.000 which is less that 0.05 thus the model is statistically significance in predicting how increased customer transactions, accessibility of banking services and low cost of service influence the financial performance of Bank of Africa. The F critical at 5% level of significance was 2.4472. Since F calculated (86.103) is greater than the F critical. This shows that the overall model was significant. The regression equation above has established that taking all factors into account (increased customer transactions, accessibility of banking services and low cost of service) constant the financial performance of Bank of Africa was0.884 units. The findings presented also show that there is a positive and significant relationship between accessibility of banking services as a result of agency banking and financial performance of Bank of Africa as shown by a coefficient of 1.251 (p value=0.000). This shows that a unit increase in accessibility of banking services as a result of agency banking would lead to a 1.251 improvement in financial performance of Bank of Africa. In addition, there is a positive and significant relationship between low cost of service as a result of agency banking and financial performance of Bank of Africa as shown by a coefficient of 0.800 (p-value=0.000). A unit increase in low cost of service as a result of agency banking leads to a 0.800 improvement in the financial performance of Bank of Africa. The study concludes that there is a positive and significant relationship between accessibility of banking services, low cost of service and customer transactions as a result of agency banking and financial performance of Bank of Africa. The study recommends that Bank of Africa in Mukono district should increase the number of agents in estates and in the rural areas. This study also recommends that bank of Africa should also lower the charges of making transactions in agency banks. To improve the adoption of agency banking, Bank of Africa in Mukono district should improve customers perception by making more advertisements and increase promotion activities.