Shem Wangila Mukambi

Masters of Business Administration (MBA)

1. Dr.Wanyama Kadian Wanyonyi
2. Dr. Okumu Argan Wekesa

ABSTRACT

Financial services can only be delivered to a majority of households if the service providers (banks) use retail distribution channels to get closer to where the poor live and at a fraction of the cost of traditional banking. Through agency banking, financial institutions are able to decongest the crowded branches by offering the services conveniently in the neighborhood. However, the extent to which agency banking can be used as a tool for growth of commercial banks remains largely unstudied. This study therefore focuses on the effect of agency banking on the growth of commercial banks in Bungoma County. This study will be guided by the following research objectives: first, it will seek to determine effect of technological advancement in agency banking on the growth of commercial banks, secondly, it will examine the effect of security in agency banking on growth of commercial banks, thirdly, the study will assess the effect of liquidity in agency banking on growth of commercial banks and lastly, to determine the effect of bank support in agency banking on the growth of commercial banks. This study will be anchored on the theory of Financial Intermediation as propagated by Allen and Santomero, this theory focuses on matching of lenders with savings who need money by an agent or third party. This research will adopt a descriptive research design. The population of the study will comprise of seven commercial banks operating agency banking in Bungoma County. Data will be collected using questionnaires and document analysis. Reliability and validity of the research instruments will be determined through test and retest techniques and Data will be analyzed by use of both descriptive and inferential statistical statistics. Data will be presented in form of tables, pie charts and graphs. The study will be of help to commercial bank policy makers in identifying the key challenges involved in agency banking operations and come up with strategies that will lead to improved performance of the commercial banks.