By December 2016, 18 commercial banks and 5 microfinance banks (MFBs) had contracted 53,833 and 2,068 agents, respectively, spread across the country. This was in comparison with the previous year, December 2015, where the number of agents contracted by commercial banks and MFBs were 40,592 and 1,154 respectively. The change implies a 33 percent (increase by 13,241 agents) and 79 percent (increase by 914 agents) growth of number of agents contracted by commercial banks and microfinance banks, respectively.
Over 87 percent of the approved commercial bank agents were concentrated in 3 banks with the largest physical branch presence namely; Equity Bank Ltd. with 25,428 agents, Kenya Commercial Bank Ltd. with 12,883 and Cooperative Bank Ltd. with 8,856. The overall increase in the number of agents is attributed to the growing confidence and acceptability of the agency banking model by the public and banks as an alternative channel of doing banking business.
The number of banking transactions undertaken through bank agents increased by 30.9% from 79,620,211 transactions recorded in 2015 to 104,193,459 in December 2016. The value of banking transactions undertaken through agents increased from KShs 442.2 billion (USD 4.3 billion) to KShs. 734.2 billion (USD 7.1 billion). The increase in total transactions & the value was largely attributable to increases in transactions relating to payment of retirement and social benefits, payment of bills, cash deposits and mini statements requests which increased by 882.1%, 275.5%, 54.0% and 44.1%, respectively.
Cash deposits, cash withdrawals and payment of retirement and social benefits continued to remain the major transactions carried out by bank agents in 2016 representing 53.8%, 31.9% and 10.9% of the total transactions in the year, respectively. Notably, account balances enquiries transactions reduced by 27.6% while payment of retirement and social benefits increased significantly by 882.1% signaling that the agency banking models are increasingly offering a variety of financial services offerings to customers. These services go beyond cash deposits and cash withdrawals which have consistently remained the top transactions conducted through agents.
The increased transactions were attributed to the significant increase in the market presence of bank agents, their products and services which are in many ways additive as opposed to competing with those of agents of Mobile Network Operators (MNO).
Central Bank Kenya