Co-op Bank acting director for retail and business banking Arthur Muchangi said by having a wider network of agents, dubbed Co-op Kwa Jirani, the lender whose local bank branch count stands at 150 hopes to grow customer numbers boosting its transactional income in the process.
Cooperative Bank of Kenya #ticker:COOP has announced plans to double its agency banking network to 20,000 this year, up from the current 10,000, as it seeks to grow its market presence and boost revenues.
Co-op Bank acting director for retail and business banking Arthur Muchangi said by having a wider network of agents, dubbed Co-op Kwa Jirani, the lender whose local bank branch count stands at 150 hopes to grow customer numbers boosting its transactional income in the process.
Agency banking has grown significantly in the country with lenders such as Equity #ticker:EQTY, Co-operative and Kenya Commercial Bank #ticker:KCB reaping big from the model.
“We want to make banking easy for our clients,” said Mr Muchangi. “We want to be available at their nearest location.” Mr Muchangi said the agents will move beyond taking deposits and accepting withdrawals to also originate loans by assisting customers to do the initial paperwork before visiting the nearest branch to get final approval and receive their money.
Equity Bank had 177 branches and 31,280 agents last year while KCB had 263 branches and 15,082 agents as at December.
Launched in 2011 following an amendment to banking laws to allow commercial banks to offer their services through third-party businesses, agency banking has experienced significant growth with providers offering unbanked customers in slums and rural areas financial access.
Latest Central Bank of Kenya (CBK) data shows the value of banking transactions handled by agents increased by 46.4 per cent to Sh1 trillion last year from Sh734.2 billion in 2016.
“The large increase was attributed to the growth of transactions relating to payment of bills, transfer of funds, cash deposits and cash withdrawals,” said CBK.
“Notably, cash deposit transactions recorded the highest increase (Sh253.4 billion) as a result of the banks’ change of business model by moving their customers from “brick and mortar” to digital channels.”
Overall, customer deposits in the banking sector increased by 10.8 per cent from Sh2.61 trillion in December 2016 to Sh2.9 trillion in December 2017, partly boosted by increased use of agency banking by customers.
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