especially the fact that they have borrowed heavily from the M-Pesa model.. likely to bridge gaps left open by mpesa..especially on security aspect.

you are right.. some mpesa agents are slowly pulling out and moving into agency banking especially the mkesho because it seems to be the one hitting the ground. And i think equity is deliberately targeting mpesa agents because of their wide network. i have seen several shops painted equity colours. So am wondering, if this is going to be for a year and then it is open to all banks, then can one agent transact for all banks or will they be locked to one particular bank?

I agree. Agency banking is a brilliant way to expand a bank's footprint and brand without having the usual heavy expense of organic or acquisition-level expansion. It has to be one of the best ideas I've seen in banking in years. That, and MPesa.

Best,

Hill

Agency Banking is a sure way of banks to gain. However, in my view unless the dynamics change, its not sustainable.

Reasons:

--1: One of the requirements to get an agency licence is to be having an existing successful business. Why?. Because you cannot make money as an agent and as such you have to multitask with the other existing business that you have to survive.

--2: The agent has to pay rent (if not own premises), hire staff, make arrangements on security of the money in their posession. (A Big problem for an agent). The bank provides the platform as well as branding the outlet etc which makes it difficult for one agent to represent multiple banks.

However, there are some synergies that your existing business will gain as a result of the association.

Understand it is not exclusive and an agent can have as many banks as it can handle. Was only told by one of the agency sales rep and have not confirmed it though.

The reason why they insist one having an established business is that this is one of the CBK guidelines.I think it was intended to ensure that only those that have bn tried and tested in business run the agencies,and people dont open,close and hawk agencies as is currently the case with mpesa lines especially since banking is a confidence business.Agency banking works in the same format as mpesa ie an agent can only receive money if he has a float with the bank, so there is no chance for an agent running off with customers money
For security,I think this is where the model has the biggest challenge given they can have as much as Kshs.300,000 in cash at any one time.Already 2 agents in my estate have been robbed Kshs.400,000 They were both running agencies with equity bank.However one of them told me that the money is insured,dont know how true that is..

They'd better lock themselves in tight- steel cage, bullet proof glass... banking agents probably have the #1 reason to apply to the KP for a firearms permit... but I'm sure that one would know the obvious risk when taking on such an endeavor. I do wonder though, God forbid one is robbed, are the agents responsible for the missing money or does the bank eat that cost? That would change the risk dynamic of the situation.

As far as fraud, the best thing would be a live webcam and instant transaction reporting. That would require a decent internet connection, but maybe that's a requirement... maybe the connection could start when a transaction starts and end when it ends, in order to save bandwidth. I would think that at least a cheap CCTV camera and DVR recorder (15000 Ksh from China) would be in order.

Am a security consultant and from the advice above, cheap is expensive.
My question to anybody wanting extra security, is the security solution you want to install worth business/premises been secured?
Good security is not cheap and with fibre and good internet connections, IP surveillance and network based DVR will be ideal, as much as price is crucial please consider your investment/s.

This is the future of banking...

How many Agency Bankers are there on Wazua and how is it going. Watu wakinyamazia inakaa there are good things happening there.
Wazua speak!