Role of agency banking in facilitating financial inclusion in Kenya

Abstract

The research project set forth to evaluate the role played by agency banking in facilitating financial inclusion. The sole objectives of the study were to study and evaluate the effects of the number of agents employed and the effects of bill payments on financial inclusion in Kenya. Secondary data in the CBK annual reports was used in the analysis stage. The sample size was 17 out of 42 commercial banks that constitute banking sector as at December, 2015. Data analysis was done using Stata. The study used correlation analysis, homoscedasticity test, normality test, unit root test and regression analysis to determine the relationship between correspondent banking and financial inclusion. The results revealed that agency banking had a significant positive relationship with financial inclusion. It was concluded that agency banking had no effect on financial inclusion. It was therefore recommended that commercial banks should equip agents with the necessary expertise to conduct due diligence on potential customers who wish to open bank accounts