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Challenges Facing Financial Services Agents: Case Study of Nairobi County

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dc.contributor.author Katela, Mercy M.
dc.date.accessioned 2017-04-11T06:51:50Z
dc.date.available 2017-04-11T06:51:50Z
dc.date.issued 2017
dc.identifier.uri http://erepo.usiu.ac.ke/11732/3180
dc.description A Research Project Report Submitted to the Chandaria School of Business in Partial Fulfillment of the Requirement for the Degree of Masters in Organizational Development (MOD) en_US
dc.description.abstract Financial services agents play an important role in the improving financial access by bringing services closer to the people. Agent banking has dramatically reduced the cost of delivering financial services to the unreached people. Despite the enormous role played by agents, they are affected by various challenges that act as an impediment to their effective operations. The purpose of the study was to investigate the challenges facing financial services agents in Nairobi County. The study was guided by the following research questions: What operational challenges affect agents in the financial services industry? What technological challenges affect agents in the financial services industry? and How do operational and technological challenges affect performance of financial services agents? The research adopted a descriptive research design. The target population constituted MPESA agents, Airtel money agents, KCB Mtaani agents, Equity agents and Coop kwa Jirani agents in Nairobi County. A structured closed and open-ended questionnaire administered face to face was the main instrument for data collection. The questionnaire was pre-tested through pilot study to ascertain the reliability of instrument in collecting required information for the study. The data was analyzed using descriptive and inferential statistics. On operational challenges, the researcher found that lack of float was a very important challenge Training was however not an important challenge. Most of the agents reported to having received training from the concerned financial institution. In cases where agents operated multiple agency services they were of the opinion that receiving training on one standard agency system for all financial institutions would improve their business. Insecurity was found to be a very important challenge although the agents had taken sufficient measures to curb insecurity in their work premises hence low insecurity incidents were reported. Agency related laws were also found to be a very important challenge with 95.3% of the agents that operated multiple agency services forming an opinion that it would be much easier to start agency businesses if the regulations did not require them to seek approvals from multiple institutions. Findings on the technological challenges revealed that 75.1% of the agents experienced system down times with 95.3% of them agreeing that network unavailability was a major hindrance to service delivery. The system down times were however not attributed to the gadgets used for agency banking as 71.7% of the agents agreed that the gadgets used for agency banking were reliable. On investigating how operational and technological challenges affect performance of financial services agents, the study revealed that lack of float (liquidity problem) and agency regulation challenge resulted in reduced monthly transaction. The findings also indicated that the more the agents experienced system down times and network unavailability, the lower the monthly transactions. Monthly transactions were used as a measure of performance. From the findings, the study concluded although lack of training was not a challenge, the agents that received training for multiple financial institutions had difficulties keeping up with the trainings from different financial institutions. Operators of agency outlets had invested in physical security measures to securing their outlets and as a result few cases of insecurity were reported. Liquidity and Agency regulated laws were important challenges that affected performance, as one cannot transact if they lack float and if the regulations are too tedious then it becomes difficult to expand the business. Further the study concluded that system down times and network unavailability were a major hindrance to service delivery and that the presence of both operational challenge predictors (liquidity, insecurity and agency regulation) and technological challenge predictors (systems down times, network unavailability) resulted in reduced monthly transactions hence reduced performance. As a remedy to these challenges the study recommends that Central Bank should consider revising current policies to allow a standard agency system platform for all financial institutions. The study also recommends setting up redundant network infrastructures to improve network accessibility and reliability. Finally the study recommended taking measures to reduce operational challenge predictors (liquidity, insecurity and agency regulation) as well as reduce network hitches as this would help financial agency operators increase their monthly transactions thus improving performance and as a result contribute to the success of agent banking in Kenya making the goal of financial inclusion as envisioned in Kenya’s Vision 2030 that agency banking is supposed to address achievable. en_US
dc.publisher United States International University - Africa en_US
dc.subject Financial Services Agents en_US
dc.subject Nairobi County en_US
dc.title Challenges Facing Financial Services Agents: Case Study of Nairobi County en_US
dc.type Thesis en_US


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