| dc.description.abstract | Despite the impressive performance by banks, customers continue to shoulder the heavy
burden of high transactional costs. In an effort to bring down the cost of offering financial
services to the Kenyan public, Central Bank together with other stakeholders have put in
place a business model aimed at broadening financial inclusion to the majority of
Kenyans at a lower cost. It is envisaged that this model will enable banks to leverage on
additional cost and effective distribution channels to offer financial services. To achieve
this, the Banking Act was amended through the Finance Act, 2009, to permit banks to
contract third parties to provide certain banking services on their behalf. The study sought
to find out the effects of agency banking on financial inclusion in Kenya.
The study adopted a cross sectional survey approach in research design. The population
consists of six commercial banks with agency banking services in Kenya .secondary data
was used since its readily available. Inferential statistical techniques were used to make a
prediction about the dependent variable based on the covariance with the concerned
independent variable.
From the findings it’s evident that there is a strong positive relationship between
financial inclusion and agency banking. The tests conducted shows that the correlation
coefficient between agency banking aspects and financial inclusion was 0.727, which is
enough to indicate the existence of strong relationship between the independent variables
and the dependent variable. The R-square is 0.529 which means that 52.9% of the
variance in the financial inclusion variable can be explained and predicted by the agency
banking aspects variables. The study therefore recommends that agency banking as a
means of enhancing financial inclusion is highly supported and encouraged by all players | en |
