IIARD International Institute of Academic Research and Development

IIARD INTERNATIONAL JOURNAL OF BANKING AND FINANCE RESEARCH (IJBFR )

E-ISSN 2695-1886
P-ISSN 2672-4979
VOL. 6 NO. 1 2020

---

Agent Banking and Financial Inclusion in Nigeria: Challenges and Prospects

Ulokoaga Daniel Ayegbeni

---

Abstract

The paper examines challenges and prospects of agency banking and financial inclusion in Nigeria. The study objective show that making financial services relevant to the unbanked on a daily basis requires agency banking that would allow Nigerians to easily convert cash into electronic value (e-value). Although gradual progress is being made to improve on financial inclusion through agency banking, critical challenges of low financial literacy, inadequate infrastructural facilities as well as inadequate and inefficient technology-based facilities by financial institutions, have limited the achievement of significant expansion in financial inclusion level in Nigeria. The study recommends that banks should register more agents as well as adopt new products by leveraging on available technology, that is all mobile and digital channels that facilitate the provision of financial services; while government should create incentives for telecommunication companies to enable them deploy quality data services in the rural areas in order to deepen financial inclusion

keywords:

Agency Banking, Financial Inclusion, Financial Services, Mobile Banking

---

References:

Adeoti, F. (2018). Financial inclusion: Inlaks leads the charge in agent banking. Being an
article published in the Punch Newspaper of September 26, 2018

Aduda, J., & Kalunda, E. (2012). Financial Inclusion and Financial Sector Stability with
reference to Kenya: A review of literature. Journal of Applied Finance and Banking.
2(6), 95 - 120.

Aduda, J.,Kiragu, P.,&Ndwiga, J. (2013) The Relationship between Agency banking and
Financial Performance of Commercial Banks in Kenya: Journal of Finance and
Investment Analysis, vol. 2, no.4, 2013, 97-117

Alliance for Financial Inclusion – AFI (2012). Agent Banking in Latin America. Discussion
paper, March 2012.

Arulmurugan, P., Karthikeyan, P., & Devi, N. (2013). Financial Inclusion in India: A
Theoretical Assessment. Indian Journal of Applied Research. Vol. 3(3), pp 217- 222.

Barasa, D. A. & Mwirigi, F. M. (2013). The Role of Agency Banking in Enhancing Financial
Sector Deepening in Emerging Markets: Lessons from the Kenyan Experience.
European Journal of Business and Management. Vol.5(21).

Bizah, D. S., & Gumbo, L., & Magweva, R. (2017). Agent banking as a driver of financial
inclusion in Zimbabwe: A review International Journal of Education and Research
Vol. 5 No. 11 November 2017
CBN, National Financial Inclusion Strategy, 2012
CBN, National Financial Inclusion Strategy (Revised), 2018
Central Bank of Nigeria. (2017). Financial Inclusion Newsletter. Abuja. p. 2–6

Chikoko, L. and Mangwendeza, P. (2012).Financial inclusion by Zimbabwean commercial
banks in a liquidity constrained environment. Journal of Economics and International
Finance. Vol. 4(10), pp. 252-259.

Caitlin, S. (2013). Do Agents Improve Financial Inclusion? Evidence from a National Survey
in Brazil. Bankable Frontier Associates

Dangi, N., & Kumar, P. (2013). Current Situation of Financial Inclusion in India and Its Future
Visions. International Journal of Management and Social Sciences Research Vol
(8),pp 155-166.

EFInA Report (2018). EFInAx – Access to Financial Services in Nigeria 2018 Survey.
Available from: http://www.efina.org.ng/assets/ResearchDocuments
Documents/EFInA-Access-to-Financial-Services-in-Nigeria-surveyKey-
Findings.pdf.

Flaming, M., Claudia M., & Pickens, M. ( 2011). “Agent Management Toolkit:
Building a Viable Network of Branchless Banking Agents”. Technical Guide.
Washington, D.C.: CGAP.

Hawkins, P. (2012). Can Agency Banking Improve Financial Inclusion In South Africa?
FinMark Trust
IDLO (2010) A New Agent Model for Branchless Banking in Colombia

Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behavior, agency
costs and ownership structure. Journal of Financial Economics, Vol 3 (4).

Kanobe, F., Alexander, P. M., & Bwalya, K. J. (2017). Policies, regulations and procedures
and their effects on mobile money systems in Uganda. The Electronic Journal of
Information Systems in Developing Countries, 83(1), 1– 15.

Kambua, D. (2015). The effect of agency banking on financial performance of commercial
banks in Kenya. MBA Thesis University of Nairobi

Kengere, D. (2014).The effects of agency banking on the non-funded income of
Commercial banks in Kenya. Unpublished MSC Finance Project, University Of
Nairobi

Kamau, J. N. (2012). The relationship between agency banking and financial
performance of commercial banks in Kenya Unpublished MBA project,
University of Nairobi.

King’ang’ai, P., Kigabo, T., K., & Kibachia, E.(2016).Effect of agency banking on
financial performance of commercial banks in Rwanda. A study of four
commercial banks in Rwanda. European Journal of Business and Social
Sciences, Vol.5,No. 01, p.p. 181-201

Levine, R. (1997). financial development and economic growth: views and agenda
Journal of economic Literature.

Lotto, J. (2016). The role of agency banking in promoting financial inclusion: Descriptive
analytical evidence from Tanzania, European Journal of Business and Management.
Vol. 8; No: 33.

Mwangi, M. H. T., & Mwangi, W.M. (2014). Factors influencing the uptake of agency banking
services by customers in commercial bank in Kenya: A case of Kenya Commercial
Bank, The Strategic Journal of Business Change and Management, Vol 2 (10).

Maëlle, D. P. (2018). Adoption of mobile money and financial inclusion: a macroeconomic
approach through cluster analysis, Economics of Innovation and New Technology,
27:2, 154-173, DOI: 10.1080/10438599.2017.1322234

Mbutor, O. M., & Uba, I. A. (2013). Impact of Financial Inclusion on Monetary Policy in
Nigeria. Journal of Economics and International Finance, 318-326.

Moghalu, K. C. (2011). “The challenge of financial inclusion: The Nigerian perspective”.
Being text of remarks at the 2011 global policy forum of the Alliance for Financial
Inclusion (AFI) at Riviera Maya, Mexico on September 28.

Mutua, P. N. (2018). Effect of financial innovation on financial inclusion in Keyan. A research
project submitted to the school of business, University of Nairobi.

Nkwede, F. (2015), ‘Financial Inclusion and Economic Growth in Africa: Insight from
Nigeria,’ European Journal of Business and Management, 7(35), 2222-2839.

Ndungu, C. G., & Wako, G. W. (2015). Customer’s perception of agency banking in Kenya:
Case study of Equity Bank Kenya Limited. Global Journal of Commerce and
Management Perspective, Vol 4 (2).

Ndebbio, J. (2004). Financial deepening, economic growth and development: Evidence from
selected sub- Saharan African countries, African Economic Research Consortium
(AERC) Research Paper 142, Nairobi, Kenya.

Ogbebor, T. O. (2015). Enhancing Financial Inclusion in Nigeria through Agent Banking:
Prospects, Benefits and Challenges. LAPO microfinance bank Archive.

Okoye L.U., Adetiloye, K. A., Erin, O., & Modebe, N. J. (2016). Financial Inclusion: A
Panacea for Balanced Economic Development. A paper presented at the 28th IBIMA
Conference: Theme -Vision 2020: Innovation Management, Development
Sustainability, and Competitive Economic Growth

Onaolapo, A., & Odetayo, T. (2012). ‘Financial Inclusion and Micro Finance Banks in
Nigeria,’American Journal of Business and Management, 1(4), 241-247

Osuji, C., & Chigbu, O. (2012). An Evaluation of Financial Development and Economic
Growth in Nigeria: A Causality Test, Department of Accounting, Banking and Finance,
Delta State University, Asaba Campus.

Rogers, E.M. (2003). Diffusion of innovations (5th ed.). New York: Free Press.

Sarma, M., & Pais, J. (2010). Financial inclusion and development. Journal of International
Development, 23, 613-628.

Sharma, A., & Kukreja, S. (2013). An Analytical Study: Relevance of Financial Inclusion For
Developing Nations. International Journal of Engineering and Science. Vol.2(6), Pp.
15-20.

Sahoo, B. B., Mehrotra, N., Puhazhendhi, V., & Nair, G., (2009). “Financial Inclusion –
An Overview” Occasional paper -48, NABARD, Mumbai

Waihenya, H. (2012). The effect of Agent Banking on Financial Inclusion in Kenya, an
unpublished MBA dissertation. UON

World Bank (2008). “Finance for All? Policies and Pitfalls in Expanding Access. World
Bank Policy Research Report. Washington DC: World Bank.

DOWNLOAD PDF

---

Back