The strides made by convenience money wallets like Mobile Money have now started taking shape with new entrants like agency banking, which brings in UGX 2.2 Trillion per month according to a recent report by Daily Monitor.
What is Agency Banking?
Agency banking, in its simplest form, is where a commercial bank secures 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
It was launched in 2018 by the Uganda Banking Association together with the Bank of Uganda, as a convenient way to bring banking services to the people through the use of third-party banking agents much like mobile money. At these agent points, customers can transact, send money, open up banking accounts among many services that they would otherwise do over traditional banking avenues.
it now has over 12,154 agents spread across the country and is growing to register a tune of UGX 2.2 Trillion in transactions per month.
Related Article: Agency Banking Explained in Uganda
Benefits of Agency Banking
It seeks to reduce the cost of operations by commercial banks, increase financial inclusion by bringing more people into the formal banking fold while also broadening up financial products such as savings & credit services as well as insurance usage.
Agency Banking Vs Mobile Money
Agency banking is seen as a reply by banks to telecom’s Mobile Money business as the latter had eased access to financial services to the masses, something formal banks have struggled to achieve even after having a head start.
Mobile Money alone is a UGX 19.3 trillion business as of 2018, according to the New Vision with over 22.7M accounts registered across all networks.
Therefore, agency banking making these headwinds is something worth celebrating for banks that have coherently wanted to overcome mobile money and manage overhead costs by redirecting users off the branch to other services like agency banking, internet/mobile banking, and ATMs
It is said that the transaction value of UGX 2.2 trillion per is higher than the UGX 800B registered over the same period, according to UBA’s ED Mr Wilbrod Humphreys.
