Abstract: The cost of travelling to a bank was often higher than the cost of making a transaction in a brick and motor institution. Since 2010, the banking sector has been making strides towards greater financial inclusion through the introduction of agency banking. Rather than using bank branches and their own field officers, they offer banking and payment services through retail outlets, including grocery stores, pharmacies, retail shops, gas stations among others. This study was carried out to examine the contribution of agency banking to the improvement in financial inclusion in Bugesera district, as this is a key pillar for Rwanda Vision 2020. The study adopted descriptive research design and focused on the activities of banks offering agency services within Bugesera district. The target population for the study was agents of commercial banks operating in Bugesera District. Simple random sampling was used and both primary and secondary data collected. The data was central-edited to account for analytical utility and the Statistical Package for Social Sciences (SPSS) used for analysis while Microsoft Excel was used for the listing and ranking of variables. Tools of classification of data was statistical tables, histograms, line charts and bar charts. For the qualitative data, simple listing of suggestions, factors and other itemized variables was adopted. After exploration and organization of the data, descriptive statistics was used. This study is expected to highlight the winning points from agency banking, which can further be exploited as Rwanda seeks to achieve its goal of financial inclusion for all, under the Vision 2020. Data collected was analyzed through SPSS version 21 and presented through percentages, means, standard deviations and frequencies. Descriptive statistical tools such as frequencies, percentages, mean and standard deviation helped the researcher to describe the data. Multiple regression models were used to analyze the data on financial performance. The study revealed that financial services accessibility by customers through baking agencies had a positive impact on financial performance of commercial banks in Rwanda. The study found that increased market share had a positive effect on the financial performance of commercial banks with many banking institutions indicating that increased market share allowed a company to achieve greater scale in its operations which generally improved its profitability. Multiple regression models were used to analyze the data on financial performance. The ANOVA results for regression coefficient indicate that the significance of the F is 0.00 which is less than 0.05. This implies that there is a positive significant relationship the effect of agency banking and performance of commercial banks in Rwanda and that the model is a good fit for the data.
Keywords: Financial services accessibility, customers, financial inclusion, commercial banks Bugesera district, Rwanda.
Title: CONTRIBUTION OF AGENCY BANKING TO THE IMPROVEMENT OF FINANCIAL INCLUSION IN COMMERCIAL BANKS IN RWANDA: A CASE OF COMMERCIAL BANKS IN BUGESERA DISTRICT, RWANDA
Author: MAGGY BIZIMANA, Dr. PATRICK MULYUNGI
International Journal of Management and Commerce Innovations
ISSN 2348-7585 (Online)
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