Agent banking system simply means providing a certain level of banking and financial services to the customers through agents deployed and they are guided by a valid agency agreement, they are appointed by financial institutions to carry out transactions on their behalf, hence, ensuring optimal reach out to large number of customers unable to move far distance for the services needed especially in Nigeria.
Numerous banks operating in Nigeria has discovered importance of investing in agent banking ensuring they cover wide ranges of communities and cities.
Early Stage of Agent Banking System in Nigeria
In 2013, agent banking was rarely recognized, meanwhile CBN released guidelines for agent banking and agent banking relationships, report shows that between the period of 2017 and 2018, agent banking system became well known across the 774 Local Government Areas.
The primary solutions these agent banking systems has provided to their customers is basically funds transfer and cash withdrawal which is mostly the need of many customers. Further to their existence they have established numerous opportunities basically for;
- Provision of employment
- Recognition of brands
- Reduction in citing and building of banks
- Enabling fast and acquisition of more customers
- Minimizing excessive expenses in locating banks
- Maintaining the Federal Government Financial Inclusion Strategy.
The agents also benefit i.e. the system provides;
- Additional income
- Employment opportunity
- Business growth and recognition
Awareness of the System
Across the states in Nigeria, it is estimated that agents established in various locations are more than 100,000. Meanwhile, this establishment is aimed at improving the services financial institutions are meant to render, with time agents from new establishment will emerge leading to serous competitions, somehow the challenge will lead to survival of the fittest due to;
- the quality of services rendered
- flexibility and liquidity of services rendered
- how quickly are issues resolved
the system though has created great opportunities for the two parties yet some challenges are faced in the system, some of these challenges are:
- improper customer care settings in the bank
- network issues in the system
- agent’s insincere attitude
- poor knowledge and experience in the system
- agent’s exposures to attacks and harassments
To read more? click here