Agency Banking in Uganda Explained

Commercial agency banking got introduced in Uganda at the end of 2017 to pick up the gap caused by the advent of mobile money. Two years down the journey, we did an insight article on the alternative solutions to mobile money that commercial banks has to offer; an opine thoughts which shows how best banks can leverage the power they have and provide products to the financially excluded.

Agency banking, in its simplest form, is where a commercial bank secure the services of an agent to provide marked financial services on their behalf outside of the traditional avenues of tellers, ATM machines and bank premises. In other sense, this a business opportunity to both parties, Banks are looking to expand their territory in agency world to tassel mobile money agents and aspiring agents are ready to bag the commission for the next available gig from banks.

Many of you could be asking the requirements of being a commercial bank agent in Uganda or you own a business and would want to become an agent yourself, here are the procedures in joining;

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The Requirements

Agent Banking regulations requires that all agents should belong to a financial institution i.e. a banking institution and different banks have different particular requirements regarding agent banking. So first, we recommend you identify a bank you would love to work with and visit them to ask for the necessary requirements.

Here are some of the general requirements needed and procedures.

1. You should be having an operating account in the bank you would like to work for, and the institution should be licensed by the Central Bank for a period of at least six consecutive months prior to the making of the application.
2. You must be having a licensed business and have been active for at least twelve months, a presentable physical address, as well as adequate and secure premises.
3. When at the financial institution, the branch manager will ask you questions in regards to your business to ensure it meets the minimal standards. You will then fill out a bank agent Application form to which you should attach a documentation of your business.
4. Your application will be submitted to Bank of Uganda for vetting and approval. Once approved, you will open a Business account for purposes of Agent Banking (in case you do not have one) and deposit a specified amount for float purchase and another for Point of sale device security deposit to start the operation.

Who can be a Commercial Bank Agent?

An agent can be any registered and licensed business ranging from  a supermarket, a petrol station, a permanent mobile money agent, a retail shop, a pharmacy or hardware store that  has been existence for at least one year.

Keep in mind, an agent cannot operate agent banking as their only business and they must hold a business account with any banks connected on to the system.

How to apply to become a Bank agent

To apply you simply follow the steps below;

1. Visit the bank branch close to your business location.
2. Respond to questions from the Branch Manager as regards aspects of your business laid out in the Agent Banking minimum standards checklist
3. Fill the Agent Application form and attached the required business Documentation
4. Application will be submitted to Bank of Uganda for vetting and approval.

The Central bank will look at the following requirements

1. Agent registration and license; The business should  be either of the following types listed below or any entity deemed fit by the central bank.

– Registered Sole proprietor

– Registered Partnerships

– Limited liability companies

– Cooperative Societies

– Microfinance Institutions

2. Agent should have an account in a financial institution licensed by the Central Bank;

3. Physical address of the business.

4. Premise security and size.

5. Past commercial activity, the business should be in existence for at least 12 months).

6. Good Credit reference Bureau report.