Agency banking brings services closer to Kenyans

27th Jan, 2016

The struggle to modernise unruly matatu trade through transit cards is expected to increase the uptake of agency banking adopted by Kenyan banks in 2011.

Edwin Otieno, Head of Agent Banking at Kenya Commercial Bank puts the number of commutters in Nairobi alone at over four million, a figure he is strategising to turn into agency banking customers.

He says the bank has recruited over 10,000 mtaani agents to help commutters easily load their cards for use as fare in public service vehicles.

“Agency banking is going to play a big role in the success of transit cards, one will be expected to have a card to pay for fare instead of the traditional card method,” he says.

“We have invested in technologies such as the point of sale (POS), this will enable our mtaani agents to load money into the cards for fare use, our POS is flexible such that it can load even cards from competing banks,” he says in an innterview.

The Point of Sale (PoS) system under which KCB transit card is running is a standard digital device designed to read a range of credit cards. To use the card, one does not need to have an account with KCB Group.

Since the launch of agency banking model in 2011, banks have been able to reach out to the unbanked population across the country.

KCB for instance has recruited over 10,000 agents now making it easier for one to deposit and withdrw cash.

Other services offered under the model includes loan payments, allows one to pay for mortagage, bills, and social payments to the elderly people. In counties such as Nakuru, the government uses agents to collect revenue.

“The uptake of this new system is overwhelming among the pastoralist communities, they are for instance able to sell their cattle and easily deposit the money with agents reducing chances of losing their sales to raiders,” he says.

In an earlier interview, the outgoing Central Bank of Kenya Governor , Prof Njuguna Ndung’u says agent banking model is designed to assist banks to lower their cost of offering banking services that has been a major impediment to inclusion while at the same time improving their earnings as more Kenyans are offered an opportunity to access financial services.

Existing rules provide that for one to be an agent they will be vetted for reputation and morals, have a certificate of good conduct and must have a good history for loan repayment.

In the case of a legally registered company, it must have records of audited accounts and be of good financial standing.

However, the regulations put responsibility to the bank to determine, based on agent risk assessment, which services a particular agent should provide.

The profile of agents includes village town wholesalers, consumer goods distributors, supermarket owners, and petrol station operators.


Side Bar

How to become a KCB Mtaani Agent

The business must be an existing legal entity (Company, Partnership, Sole Proprietorship)

The business must be in existence for a minimum of 18 months.

The business should be serving at least 50 customers per day

The business should have ability and willingness to deposit at least Kshs 100,000 to start off Agent Banking Services

The Outlet should be run by at least a Manager and two assistants who have attained minimum KCSE Certificate

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