Phones to Drive KCB's Agency Banking
KCB will rely on its mobile system to roll out agency banking services launched on Wednesday, deepening telecommunication companies' linkages with financial institutions in joint ventures to reach out to the unbanked population.
The bank's chief executive officer, Mr Martin Oduor-Otieno, said agents will only require telephone handsets to accept deposits and make withdrawals for customers, in a system similar to that used by operators of mobile phone money transfer operators.
KCB's approach to agency banking through the mobile phone has been used by Equity and Co-operative Banks that have rolled out similar services based on systems heavily borrowed from M-Pesa, the mobile money transfer service developed by Safaricom.
The lender said it was targeting to recruit close to 5,000 agents "over the next few years", raising competition for the unbanked population currently estimated at nine million.
Banks signed up 8,809 agents last year, according to data from the Central Bank of Kenya. This led the sector to increase the total customer deposits by about Sh600 million over a three-month period.
Oduor-Otieno said KCB is seeking to recruit agents with already established businesses.
We are targeting supermarkets, branches of large corporations, petrol stations and small businesses," he said.
"Our agents will be connected to our agency banking platform through the mobile banking platform," he said.
Among the conditions set out for prospective agents is their ability to make their own security arrangements while they can access bank loans to fund the agency business, subject to raising a minimum capital of Sh100,000.
It will cost customers Sh20 for any cash deposits with the agent earning the full amount while withdrawals with costs Sh70 where the bank and the agent share it on a fifty-fifty basis.
An agent offers the basic services just as a fully fledged bank branch including cash deposits and withdrawal, disbursement and repayment of loans, payment of salaries, pension, transfer of funds, and issuance of mini-bank statements, among others.