An Evaluation of the effectiveness of agency banking as a financial inclusion strategy in commercial banks of Zimbabwe

Abstract

The research sought to evaluate the effectiveness of agency banking as a financial inclusion strategy in commercial banks of Zimbabwe. Financial inclusion is the effective use of a wide range of quality affordable and accessible financial services, provided in a fair and transparent manner through formally regulated entities. The effectiveness of agency banking in ensuring that the under-banked are financially included remains questionable. Owing to the massive cash crisis the nation is facing, according to RBZ (2018) it has been reported that agents have been closing, access to full financial services is becoming a challenge .The aim of the research is to identify the relationship between usefulness, easiness, proximal location and risks of agency banking as a strategy of financial inclusion. The study was informed by the agency theory, bank led model and the technology acceptance model. A survey strategy was carried out in the commercial banking sector. Quantitative data collection technique was used in which a questionnaire was used to collect data from 4 commercial banks particularly Steward Bank, Agribank, FBC, and POSB. A sample of 341 respondents from customers, was used. Data obtained was subject to different statistical analyses which included manipulation in the SPSS environment and use of tables with frequencies that allow comparison to establish statistical relationship.The research findings revealed that there is a positive and significant relationship between ease use of agency, usefulness of agent banking and proximal location and financial inclusion. The research also found a negative and insignificant relationship between risks associated with agent banking and financial inclusion. In order to improve financial inclusion through agency banking banks must improve proximity to customers and coming up with more useful services to customers. There is need to educate customers and agents about online banking systems for their convenience and easiness of using services. A further study was recommended on a similar topic to incorporate a mixed method approach to maximise the advantages of both qualitative and quantitative methods.