This website uses cookies to ensure you have the best experience. Learn more

Agency Banking Essay

1565 words - 7 pages


Agency banking is a new banking concept introduced in Tanzania by the Bank of Tanzania (BOT). The main objective is to increase financial services outreach and to promote financial inclusion to the un-banked and under-banked population without risking the safety and soundness of the banking system. The concept is also geared towards encouraging financial institutions to use agents in the provision of banking services so as to reduce the cost of financial services and to foster financial inclusion, reach and depth. Commercial Banks worldwide offer similar kinds of services, but they could provide differences in terms of service quality. This paper analyzes past studies regarding ...view middle of the document...

Other financial institutions, especially in developing markets, use agents to reach an “additional” client segment or geography. Reaching poor clients in rural areas is often prohibitively expensive for financial institutions since transaction numbers and volumes do not cover the cost of a branch. In such environments banking agents that piggy back on existing retail infrastructure – and lower set up and running cost - can play a vital role in offering many low-income people their first-time access to a range of financial services. Also, low-income clients often feel more comfortable banking at their local store than walking into a marble branch.
Banking agents are the backbone of mobile banking, i.e., performing transactions over a mobile device, most often a mobile phone. To enable clients to convert cash into electronic money and vice versa which can send be sent over their mobile phone, clients will have to visit a branch, automated teller machine (ATM), or banking agent. Especially in remote and rural locations, where cash is still the most important way to pay and transact, a mobile banking service is dependent on banking agents to enable clients to effectively use the service.

Statement of the Problem
The most rural population has remained largely unbanked. Rural entrepreneurs’ access to banking services in these areas has been hindered by the assumption that rural populations have low incomes which are not sufficient to sustain banking operations; hence most formal banks have shied away from offering banking services to rural areas for many years. Recently, commercial banks in collaboration with the mobile phone service providers came up with the new innovation of mobile and agency banking. Given the potential for the transformative impact of such a service to the rural population, despite the known impact, most of Small and Micro Enterprises (SMEs) owners are still not utilizing the mobile banking to the full potential if used at all. The question that begs for answer and requires immediate intermediation is what ails adoption of this type of technology. This question motivated and guided the researchers to conduct this study focusing technology adoption and agency banking by looking at the factors causing difference.
Though the Bank continues to invest in rolling out brick and mortar branches that are complimented by various delivery channels, the challenge of access to formal financial services remains a big impediment to financial inclusion. Tanzanians (especially in remote areas) are forced to travel long distances and spend huge amounts on transport in order to access a branch. In addition to the cost of transport is the time spent commuting to and fro that could have been spent more productively.
To curb these challenges, the Central Bank of Tanzania released a legislation that allows commercial banks to contract third party retail networks as agents. Upon successful application, vetting and approval, these Agents are...

Other Papers Like Agency Banking

Islamic Banking Essay

1714 words - 7 pages Contents 1 2 10 12 What is Islamic banking? Islamic banking in Malaysia Observing Shariah principles Shariah concepts in Islamic banking Frequently asked questions Glossary This booklet tells you about the basic concepts and principles of Islamic banking. What is Islamic banking? Islamic banking is banking based on Islamic law (Shariah). It follows the Shariah, called fiqh muamalat (Islamic rules on transactions). The rules and

Donation Letter Essay

321 words - 2 pages January 25, 2013 Mr. Joe Bloe Chase Bank 555 Regional Road Mount Laurel, NJ 08054 Dear Mr. Joe Bloe, Canon Supply Company is a large and diverse nonprofit social service agency headquartered in Huntsville, AL with over 170 programs in 14 states. We are loyal customers of Chase Bank that hold accounts with your bank in multiple states. Canon serves over 35,000 individuals annually, 800 of these who are individuals with disabilities

Commercial Banks And New Capital Regulation

3326 words - 14 pages Financial Services Agency (2011) is a Japanese government agency that oversees banking, securities and exchange and insurance to protect stabilize Japan’s financial system. The FSA oversees the Securities and Exchange Surveillance Commission (SESC). The majority of Japanese banks is well positioned in Basel II IRB approach and will need to have greater capability to meet Basel III the requirements when compared to other Asian counterparts

Termpaper on Poverty.Doc

967 words - 4 pages conventional financial system. The thrust of this project is to articulate the prospects of the micro finance banks towards boosting the performance thereby reducing the level of poverty and enhancing employment generation. Micro finance banking institution were conceived and came into been in December 2007. It was packaged to address the issue of cultivating appropriate modern banking habits in the rural area, through the social local institution

Bank of America Case

1302 words - 6 pages ensure a good service to their customer; they used SMS, web browser and apps, depending on the bank and the customer they served. • Citibank and Wells Fargo had different applications for their target groups, making this a customized service. Collaborators • Starcom, agency that supports the bank on digital matters. • Other agencies and consulting partners. Context • The banking industry was fragmented, with thousands of banks offering

Basel Ii Implemenatation

4612 words - 19 pages Countries 5 In Other Countries 6 Banking Supervision Improvement Priorities 6 III. History of Banking Supervision in Albania (Banking System in Albania and Supervisory Process. 7 IV. Three Pillars of Basel II and the implications related to the implementation in Albania: 10 1.Pillar 1 – Capital Defined 11 1.1 Pillar 1 – Credit Risk 11 1.2 Pillar 1 – Market Risk 15 1.3 Pillar 1 – Operational Risk 16 2

Marketing Essay

963 words - 4 pages depending on the threshold that is being managed. In South Carolina, the agency that manages the profession is the Office of the South Carolina Office of the Attorney General Securities Division ( ). Most investment bankers become members of the Investment Bankers Association and the Middle Market Investment Banking Association. The first entity is a professional organization that assists businesses which desire to expand by raising capital

A Case Study Of Banks In Fiji

4467 words - 18 pages A CASE STUDY ON BANKS IN FIJI COMPILED BY: SHINAL PRIYANKA CHAND 1 INTRODUCTION Fiji has a well developed financial system that not only is secure and sound but has remained flexible despite the recent global financial crisis. The strong involvement of the banking industry to the Fiji Financial System has been a major factor in this regard. Over the years the Banks have invested heavily in

Law Adi & Apra

2107 words - 9 pages QUESTION 1 a) Having the license for APRA (Australian Prudential Regulation Authority), Victoria bank is an authorised deposit taking institution (ADI). Been a part of APRA, which is needed to operate as a bank legally in Australia, it gives Victoria Bank the licence to undertake ‘business of banking’ which is defined in the Banking Act 1959. This shows that Victoria bank has fulfilled the ADI application requirements including sufficient

A Research Proposal on Mpact of Rural Banking on Farmers in Bangladesh

4007 words - 17 pages A RESEARCH PROPOSAL ON IMPACT OF RURAL BANKING ON RURAL FARMERS IN BANGLADESH (Md. ibrahim kholilullah,Agricultural Economics and Business Studies, sylhet Agricultural University,Bangladesh; phone: 01718996557) INTRODUCTION: Bangladesh is an agro-based country, essentially are endeavoring for rapid development of the country. More or less 80 percent people directly or in directly depend on agriculture for their occupation .But it


2424 words - 10 pages Synopsis Merchant Banking in India Introduction Merchant Bank A merchant bank deals with the commercial banking needs of international finance, long term company loans, and stock underwriting . A merchant bank does not have retail offices where one can go and open a savings or checking account . A merchant bank is sometimes said to be a wholesale bank , or in the business of wholesale banking . This is because merchant

Related Essays

Agency Banking Essay

284 words - 2 pages CHAPTER ONE: INTRODUCTION 1.1 Background of study Mobile Money Transfer Providers are economic organizations or business organizations that can be family firms, partnerships or limited companies that have been formed with the aim of fulfilling a certain objective that is set. The providers engage in business ventures that range from vendors, manufacturing, and customer service. The providers juggle different types of businesses with the aim of

Describe Three Financial Innovations Which Have Been Introduced By Banks In Kenya In The Recent Past As A Way To Increase Effeciencyand Reduce Cost

431 words - 2 pages developing alternate channels, like full mobile phone banking and agency banking. The first two factors of increasing efficiency of branch operations and designing the branches to promote volume are considered below. Designing efficient infrastructure: Banks have to fully staff branches, and empower staff to handle all normal queries. This means significant investment in training and orientation, whilst on the job training is used, it is

History & Development Essay

4310 words - 18 pages Shariah. Several other IFIs were established to create, regulate and support the emerging IFIs. i.e- International Islamic Rating Agency (IIRA), etc. 1978 ( Luxembourg) Today (Western) 1991 (Bahrain) 2002 (Malaysia) Today (World) Islamic Banking and Finance Today • Total Assets : USD 400-500 billion • Total IFIs : 275 in 75 countries. Development of Islamic Banking and Finance in Bahrain Year 1973 Key Milestone Since its

Green Banking Essay

4779 words - 20 pages environmental challenges of the country. 3.2 Reporting in Standard Format with External Verification Banks should publish independent Green Annual Report following internationally accepted format like Global Reporting Initiatives (GRI) targeting their stakeholders. There should be arrangement for verification of these publications by an independent agency or acceptable third party. Reporting Green Banking Practices on Quarterly Basis Banks shall report