Faulu launches agency banking

Micro-lender Faulu has rolled out its agency banking in the country, coming about four months after it had piloted the programme.

Managing Director Apollo Njoroge said the trial showed that Murang’a County had the highest volume of transactions owing to agricultural activity as most residents are farmers engaged in agri-business.

Speaking in Murang’a town yesterday during the launch, Mr Njoroge said the microfinance lender so far has over 400 agents across the country.

“Our intention is to align ourselves to the devolution agenda that ensures services reach the community at the grassroots. Agency banking, among other alternative payment solutions, has improved our customers' banking experience which is key enabler to delivering superior service,” he said.

Faulu said its venture into agency banking was to deepen its reach by offering convenience to its customers regardless of their location.

The micro-lender is targeting to grow the number of its agents to at least 2,000 as foot traffic to banking halls falls.

Faulu, controlled by South Africa’s Old Mutual Group, saw its net profit for 2018 increase by more than three-quarters to Sh190.44 million.

The lender’s gross loans to customers increased to Sh19.18 billion in 2018 from Sh17.28 billion the previous year, helping grow revenue from fees and commissions by 40.28 percent to Sh621.19 million.

Commercial banks in the country are increasingly turning to agency banking as they seek to take their services to previously under-served segments.

According to Central Bank of Kenya data, the number of transactions undertaken by agents in 2017 shot up from 104 million to 139 million, representing a 34 percent increase.

The value transacted through the model hit a record high of Sh1.07 trillion in 2017, up from Sh734 billion in 2016, underlining its popularity.