Bank agents grow by 20pc as lenders aim to cut costs
- Data released by the Central Bank of Kenya (CBK) shows that 10 commercial banks had contracted 12,054 active agents by the first half of this year, up from eight that had contracted 10,006 agents as at the end of March.
The number of agents contracted by commercial banks rose by 20 per cent in the three months to the end of June this year, indicating a strong uptake by lenders who are seeking to reach more customers in a cost effective way.
Data released by the Central Bank of Kenya (CBK) shows that 10 commercial banks had contracted 12,054 active agents by the first half of this year, up from eight that had contracted 10,006 agents as at the end of March.
Over the same time period the number of bank branches stood at 1,196 an increase of two per cent from 1,174 branches.
Equity Bank disclosed during announcement of its half-year results that its 5,004 agents were now doing 24 per cent of bank transactions per month, up from eight per cent as at the end of June last year.
“On a daily basis we are moving an average of half a billion through agency banking agents who are now doing 24 per cent of the bank transactions and we are projecting that the agents will overtake branches in terms of transactions and volume of money,” said James Mwangi, chief executive officer, Equity Bank.
Nasim Devji, DTB’s chief executive officer and managing director said the bank is planning to launch its agency network on October 1 to support the bank’s branch network by reaching more customers in a convenient way.
CBK said that as at the end of June this year, the sector’s agency network had facilitated over 18.7 million transactions valued at Sh93.1 billion up from the over 13 million transactions valued at Sh64.8 billion that had been done by the end of the first quarter.
Equity Bank last week said it was following a model of gathering large volumes of relatively small deposits resulting in low costs and stable funding generating high transaction volumes at low cost for the customer, adding that the rollout of agency banking was helping to get closer to customers in remote areas.
“Equity Bank continues to reap from the agency banking model, with the number of agents rising from 875 to 5,004 agents as at the end of the first half of 2012,” said Genghis Capital in a research note.