Abstract: The problem of slow growth of agency banking compared to the projected growth remains a country wide challenge for Kenyan banking institutions owing to several factors, and this had to be explained through a scientific research by assessing banking related factors that may have had influence on growth of agency banking. This study was carried out to establish the factors influencing the growth of agency banking of commercial banks in Trans Nzoia County in Kenya. The study was conducted under guidance of the following objectives; To establish the influence of technology infrastructure on the growth of agency banking of commercial banks in Trans Nzoia County in Kenya. To determine the influence of agent to bank distance on the growth of agency banking of commercial banks in Trans Nzoia County in Kenya. To find out the extent to which security influences the growth of agency banking of commercial banks in Trans Nzoia County in Kenya. The study sought to test the following hypothesis; There is no significant relationship between technology infrastructure and growth of agency banking of commercial banks in Trans Nzoia County in Kenya. There is no significant relationship between distance of agent location to bank and growth of agency banking of commercial banks in Trans Nzoia County in Kenya. There is no significant relationship between security and growth of agency banking of commercial banks in Trans Nzoia County in Kenya. The study employed an ex-post facto descriptive survey research methodology with both quantitative and qualitative research designs. The study targeted a population of 222 banks’ agents of commercial banks in Trans Nzoia County in Kenya comprising of; Equity Bank agents, Co-operative Bank agents, Kenya Commercial Bank agents, National Bank agents and Post Bank agents. Yamane, T. (1967) formula was applied to obtain a sample size of 69 bank agents. The primary data for the study was obtained through questionnaires and through field observations. The questionnaire was pilot tested using a sample of ten (10) respondents from Bungoma County after which its reliability was determined using correlation coefficient (r) and obtained r=+0.68.The secondary data for the study was obtained through document review. The sample for registered bank agents was determined through stratified sampling in accordance with the classification of the commercial banks and finally random sampling. The final data analysis was done using Statistical Package for Social Sciences (SPSS). From the study’s findings, hypothesis tests revealed that; there was a significant negative relationship between technology infrastructure and growth of agency banking in Trans Nzoia County at 1% level of significance. There was a significant positive relationship between agents’ to bank distance and growth of agency banking of commercial banks in Trans Nzoia County at 1% level of significance. There was a significant positive relationship between security and growth of agency banking of commercial banks in Trans Nzoia County at 1% level of significance. Based on the study findings it is suggested that banking institutions need to develop strategies that will enhance agency banking by encouraging more customers to transact at the agent terminals. The study suggested for further research as follows; Research to be carried out on the influence of network availability on growth of agency banking. Research to be carried out on the ways of enhancing agency banking to ensure maximum utilization
Keywords: Agency banking, Growth, Commercial banks, Technology, Lending, Growth, Security.
Title: Factors Influencing the Growth of Agency Banking of Commercial Banks in Trans Nzoia County in Kenya
Author: Nelius Waiyego Kariuki, Prof. Gregory S. Namusonge
International Journal of Management and Commerce Innovations
ISSN 2348-7585 (Online)
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