Analysing the opportunities and challenges of agency banking in Diamond Trust Bank Uganda Limited

Abstract

This research aimed at exploring the opportunities and challenges of agency banking at Diamond Trust Bank (DTB); The study was premised on three objectives; to explore the opportunities for agency banking, to investigate the challenges faced by the banking agents and to recommend strategies that can improve Agency Banking at Diamond Trust Bank Uganda Limited. The study employed a cross-sectional and exploratory research design with a qualitative study approach which involved collecting qualitative data at saturation from 28 bank staff and agents out of a sample of 37 staff who were targeted, using an interview guide. Data were analyzed using the ATLAS-ti Qualitative software (Version 9). After transcribing and coding the data, network schematic diagrams were developed. The findings from the research revealed that growing businesses, brand visibility, cost reductions, agents acting as ambassadors, employment opportunities, and financial inclusion are some of the opportunities agency banking provides to the different stakeholders. The study also revealed challenges associated with agency banking businesses in Uganda, which included stringent regulatory requirements, internet or network failure, fraudulent activities, insecurity, poor record keeping, a lack of capital, high transaction costs, low commissions, and faulty or incompatible agency machines. From the research, strategies were discovered that could help improve agency banking, such as using the duo network platform, bank field visits, good management, supporting agents through overdrafts, using super agents, using mobile apps, collaboration with banks, following regulations, training, and money detecting machines. Therefore, this study recommends that banks develop their own network platforms in addition to the ABC platform, collaborate so that they employ the same agents and train their agents on security tips and record keeping; and the study suggests that the Bank of Uganda collaborates with commercial banks to provide appropriate regulatory requirements for agency banking in Uganda and to promote compliance among the institutions.