By Samuel Sanya
Cabinet has approved proposals to enact agent banking in a bid to extend banking services to areas that are currently underserved by banks and other financial institutions.
“Extending financial services to the rural areas and the poor will have a positive impact on household incomes,” said Vice- President Edward Ssekandi.
“I believe that to create impact and promote economic development, there is need for both short-term and mediumterm financing for the agricultural sector,” he added. He was speaking at Centenary Bank’s customer day at Mapeera House in Kampala.
Agent banking allows banks to use shops, kiosks and field agents to open accounts, receive deposits and effect withdrawals.
Kenya and Rwanda already have agency banking.
The introduction of agent banking by both banks and deposit taking microfinance institutions in Kenya has increased the level of formal financial inclusion in unserved and underserved areas.
This has led to close to 17,000 approved bank agents’ facilitating over 45 million transactions valued at over $2.76b at the end of May 2013, mainly leveraging on mobile phone technology.
Fabian Kasi, the Centenary Bank boss, noted that they are looking to expand their reach through mobile solutions in addition to opening brick and mortar branches.
The bank has entered into partnership with Ezee Money, a mobile payments provider with 15,000 agents around the country to receive customer deposits.
Edith Kababure, the Centenary Bank chief manager ebanking, noted that the bank is looking to enlist about 10,000 agents at the end of 2014 after enabling policies are enacted.
The agents will be empowered with a proper banking mandate of bank teller to open accounts, receive deposits and effect withdrawals, in a bid to improve turnover.