ASSESSMENT OF AGENT BANKING SERVICES OF COMMERCIAL BANKS IN PROMOTION OF FINANCIAL INCLUSION IN ETHIOPIA

Abstract

This research work aims to assess agent banking services of commercial banks in promotion of financial inclusion in Ethiopia hoping that the finding of the research will add value to various stakeholders (NBE, Banks, Agents, Customers and others) for policy formulation, decision making and serves as an input for further research work in the field. It is a descriptive research design employing the quantitative data type and collected to explore the research question. The research work was delimited to relevant institutions having direct role and supporting role to the subject matter. Question with close and open ended were distributed. Branch Mangers conducted interview with researcher. Questioner designed for both bank branch managers and agents which had twenty two and twenty five questions each in six sections respectively. Additionally, the research tried to review various empirical and theoretical literatures in light of having an in-depth understanding on the subject matter to supplement the research construct. The research found out that agent banking service is a successful catalyst of financial inclusion demanding an immense opportunities towards enhancing accessibility to financial service to the unbaked or under banked of the vast community of Ethiopia and serving as additional revenue generation mechanism, cost reduction, risk diversification for financial institution and customers get banking service nearest to them at low cost and minimal time and queuing. The finding of the research revealed that geographical coverage, liquidity, cost and security are the major aspects in promotion of financial inclusion in Ethiopia. In order to enhance financial inclusion in Ethiopia focusing on those elements of financial inclusion has not a choice for the stakeholder of agent banking. Therefore based on the finding of the research, it was recommended that, those stakeholders in respect of their role played in promoting agent banking model; so-as-to enhance financial inclusion to vast people of Ethiopia; working and providing due attention for elements of financial inclusion in order to reduce observed setback of geographical coverage, liquidity, cost and security has play fundamental role in promotion of financial inclusion in Ethiopia.