Adoption of Agent Banking Services Among Residents of Kawangware Area in Nairobi - Kenya

Abstract

Agent banking took effect in Kenya in May 2010 after the publication of Prudential Guidelines (PG 15) by the Central Bank of Kenya. Agent banking has been practiced in a number of Countries such as Brazil, Columbia and Indonesia. It is a retail or postal outlet contracted by a financial institution or a mobile network operator to process clients’ transactions. The objectives of this study were: To determine the extent of adoption of agent banking services by the residents of Kawangware in Nairobi; To determine the kind of services being utilized through Agent banking channels; To determine factors influencing adoption of Agent banking channels by consumers. This research was conducted through a descriptive research design. The population of study was bank customers in the Kawangware area of Nairobi, Kenya. A sample of one hundred and twenty customers was used through systematic sampling. Each of the three Banks being studied provided respondents. The interview guides had both structured and open-ended questions. After the interview guides were filled up and before processing the responses, they were edited for completeness and consistency. The study concludes that the respondents were in Equity Bank, KCB and Cooperative Bank. The respondents were using agent banking services. The study concludes that accessibility to where customers lived or worked as well as friendly service influenced the respondents in using agent services. The study found out both the POS and Mobile Phone Channels were acceptable to Customers. Banks need to educate its customers on agent banking services through mass media, sales officers and other bank staff.