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Uganda edges closer to Agent Banking

KCB Bank Uganda officials at the launch of Agency banking services set to begin next year. Photo by Badru Afunadula.

Following the success of agent banking in Kenya, banks in Uganda have already started moving towards the same direction. One such bank is KCB Bank Uganda.

It has trained potential banking agents in preparation for the roll out of agency banking services to Ugandans.

According to Michael Ssekyondwa, the KCB Agency and Digital Finance Manager, the bank is expecting to officially start agency banking services early next year.

“We have taken a lot of time to make sure that we identify quality agents, those who are able to provide infrastructure, premises and invest money in their business and have the capacity to serve our customers. So far, we have 27 agents that have been approved by the Central Bank,” Ssekyondwa noted.

Agency banking is where a commercial bank appoints a third party (agent) to transact business on its behalf.

The agent could be a petrol station, a retail or hardware shop, a supermarket, among others.

According to Bank of Uganda, Agency Banking is expected to stimulate financial inclusion and deepen the financial sector. Customers will now be able to deposit, effect withdrawals and carry out other transactions through the bank agents.

In addition to training agents in preparation for the roll out, the bank has also invested in a robust system technology.

“We know that for agency banking to work to successfully, it has to be anchored on a very stable and strong platform and we have done a lot of groundwork to test our systems to avoid any system failures.”

According to Ssekyondwa, agency banking is still a new concept in the market and a learning area for both bankers and agents.

“There is still a lot of knowledge gaps,” he notes.

“We need to bridge these gaps by constantly training our agents for them to appreciate how the agency banking channel is going to operate,” Senteza Musa, one of the KCB agents present during the training noted that agency banking will increase traffic into his printing business which he can turn into sales meaning additional revenue for his business.

“I now know how a point of sale machine will work, I have also learnt the kind of services that I will offer to my customers who want to bank,” he adds.

“I hope that my printing business will make additional profits because of agency banking.”

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