Journal of Finance and Bank Management

An Evaluation of the Agency Banking Model Adopted by Zimbabwean Commercial Banks
Tinevimbo.V. Chokuda Santu , Wilford Mawanza, Victor Muredzi

Abstract
The research seeks to determine if the agency banking model has managed to resolve the gap of bringing banking services closer to the people at more affordable costs and accessibility challenges associated with traditional banking. A descriptive research design was used and the research sample was drawn from the five Commercial Banks actively operating agency banking in Zimbabwe. Findings were that the five commercial banks in Zimbabwe that are engaged in agent banking operations have achieved significant expansion in geographic coverage which in turn has led to a notable increase in the customer base. The research identified the challenges faced by commercial banks in operating agency banking operations and these include reputational risk, consumer protection and legal risk. The agents on the other hand face challenges such as liquidity risk, operational risk, and credit risk. The RBZ involvement is however critical for agency banking in as far as smoothening the initial challenges and as such the model is deemed to be a viable distribution alternative. In light of some of the challenges associated with the implementation of the model, it is recommended that commercial banks in Zimbabwe should adopt the agency banking model subject to addressing the issues raised.

Full Text: PDF     DOI: 10.15640/jfbm.v5n2a6