Since agency banking emerged as a strategy to improve financial inclusion in less economically developed countries in the mid-2000s, this model of delivering financial services has continued to spread in Africa. From M-Pesa’s successful outreach in Kenya to a slew of fintech startups that have aimed to replicate this model, agency banking services are becoming popular on this side of the world.
Agency banking is a financial service that delivers to the last mile using human agent networks or merchants. These agents perform services on behalf of an entity like Fincra. The most common tool agency banking agents use in Nigeria is the point-of-sale (POS) machines.
In Nigeria, this financial service model has solved problems for the millions of unbanked people, especially in rural areas. Thanks to agency banking, access to financial services in a largely poor mass market have deepened. With the cost and complexities of setting up and running branches, the traditional banking system has maxed out on its reach, causing financial services to elude millions of people living in rural areas.
In Nigeria, startups, telecoms and even traditional banks have used agency banking to plug the obvious gaps for the unbanked to significant success.