Determinants of Uptake of Agency Banking in Tier Two Banks in Kenya

The purpose of this study was to investigate the determinants of uptake of agency banking in Tier II banks in Kenya. Though commercial banks agents contribute immensely to economic development their input in economy has been constrained by some factors which influence uptake of their agency services. These factors led to the researcher formulating a topic that guided the research process and the final results were used to evaluate the determinants of uptake in agency banking in Tier II banks in Kenya using the following objectives, To examine the effect of agency banking regulations on uptake of agency banking in Tier 2 banks, To determine the influence of perceived cost on uptake of agency banking in Tier 2 banks, To evaluate the effect of perceived security on the uptake of agency banking in Tier 2 banks and to assess the influence of agent training on uptake of agency banking in Tier 2 banks. Theoretical framework was reviewed in line with the research variable and a conceptual framework developed in line with the research objectives. Agency banking uptake was the dependent variable while government regulations, perceived cost of uptake, security and agents training were the independent variables. The study adopted a descriptive research design. According to (Kothari, 2004), descriptive study is concerned with finding out the what, where and how of a phenomenon Total population of Tier 2 banks with agency banking were 10 and from these the convenient sampling methodology was applied to identify the bank agents in Ongata Rongai town. The reason for choosing Ongata Rongai Town was because its a cosmopolitan Town with several shared agents of Tier two banks. Questionnaire was the main instrument of data collection. The major source of data was primary data obtained from bank agents through the questionnaires that combined the features of both open ended and closed questions. According to Cooper & Schindler, (2006) observed that, a questionnaire defines the problem and the specific objectives of a study. Data collected was analyzed using SPSS since it allows statistical tools such as correlation and then it was presented in tables and bars. The main variables influencing uptake of agency banking among the Tier II banks were government regulation, perceived security and agent training. Perceived uptake cost was not influencing uptake since this was a once off cost except the cost of maintaining cash.