Assessing customer willingness to use agent banking in Uganda: A Case study of commercial banks in Kampala District

Abstract

The study assessed customer willingness to use agent banking in Uganda using commercial banks in Kampala as the case study. The study was guided by three objectives: to determine the level of customer awareness about agent banking; to establish why customers were not willing to use agent banking; and to explore the benefits of agent banking to commercial banks. The study used a sample of 122 respondents which included 100 customers and 22 commercial bank staff. Quantitative data was collected using questionnaires and analyzed using SPSS Version 23 while qualitative data was collected using interview guides and analyzed using the thematic analysis approach. The study findings revealed that all respondents had knowledge about agent banking and its benefits; however, only 45% had used agent banking. The findings also revealed that; the reliability and stability of the agent banking network, the amount of float that the agents held, the number of financial services that could be accessed using agent banking and the quality of service and care that agents offered to customers influenced customer willingness to use agent banking. Study findings further revealed that the benefits of agent banking to commercial banks included: increased number of customers in terms of accounts opened, increased customer deposits, extension of financial service commercial banks benefit from agent banking in terms of improved financial performance, s to areas where commercial banks didn’t have branches, and improved bank income, earning and profitability. The study concluded thatearnings, and profitability. The study recommended that customer willingness to use agent banking could be enhanced by improving the quality and stability of network connection at agent banking points, subsidizing agent banking transaction costs, training commercial bank agents in customer service and increasing agent banking points.