| Abstract: | This is a descriptive study aimed at assessing the factors affecting adoption of agent banking and electronic banking in Ethiopian banking industry. A survey design was employed by use of questionnaires sent out to the respondents. The study population comprised the selected ten banks, namely Commercial Bank of Ethiopia, Awash International Bank, Dashen Bank, Bank of Abyssinia, Wegagen Bank, United Bank, Nib International Bank, Zemen Bank, Birhan International Bank and Abay Bank. The data collected was analyzed using descriptive statistics. A research framework developed based on technology-organization-environment framework.
The findings of the study revealed that the main challenges face the banking industry in adoption of agent banking and e-banking are lack of adequate national ICT infrastructure, Lack of skilled IT personnel’s, Lack of government support, Security risk, Lack of legal and regulatory frameworks and lack of competition between local and foreign banks. This study found that the introduction of third party retail agents presents several risk factors with regard to effective regulation and supervision of banks. The study also identified perceived ease of use and perceived usefulness as prospects of adopting agent banking and e-banking system.
The study recommends that Ethio telecom should have to support banking industry by investing on ICT infrastructure developments, government should support the banking industry by introducing financial education program, establishments of a comprehensive legal and regulatory frame works on the use of technological innovation and the use of third party retail agents in banking sector, regulator closely monitors the banking sector and strictly enforces compliance with the agent banking guidelines, while the banks continuously ensure careful vetting of agents. |
