Appraisal of Agency Banking as a Financial Inclusion Strategy in Nigeria

Abstract

Apart from the desire to grow earnings and market share, financial inclusion is an important objective for the introduction of agency banking. Agency banking is the provision of financial services to customers by a third party on behalf of a particular bank. Agent banking services is rendered through the use of POS terminals, card readers, Mobile Phones, among others for real time transaction processing. This study appraised agency banking as a financial inclusion strategy in Nigeria. The specific objectives were to determine the extent to which agency banking has enhanced financial inclusion in Nigeria, examine the extent to which agency banking has reduced the cost of delivering banking services and ascertain the extent to which agency banking economically empowers the agent banker. The study adopted the survey research design. Primary data were collected through the use of questionnaire which was distributed to agent bankers and users of financial/banking services. The data collected was analyzed with the Chi- Square method using the Statistical Package for Social Sciences (SPSS). Finding revealed that agency banking has positive and significant impact on financial inclusion, reduces the cost of delivering banking services by the banks and economically empowers the agent banker. The study therefore concluded that agency banking is a relevant and vital strategy for financial inclusion in Nigeria. It is therefore recommended that favourable operating conditions and appropriate security be provided for the smooth running of agency banking in Nigeria.

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