Agent banking has allowed commercial banks appoint a third party (agent) to transact business on its behalf. PHOTO/FILE Agent banking was launched in 2018 to ease access to financial services and enhancing financial inclusion.
Since its launch, the mobile banking innovation is one of the most used financial platforms in Uganda besides mobile money.
In March this year, it was revealed that the amount of money transacted through agent banking stood at Shs2.2 trillion per month, according to Uganda Bankers Association (UBA).
However, the economic effects of Covid-19 pandemic have significantly affected the innovation, which has resulted into reduced transactions.
The number of times customers used agent banking to transact during lockdown dropped by 27 per cent compared to before the virus induced lockdown.
Between January and March, agent banking recorded 7 million transactions, but this number dropped between April and June to only 5 million transactions.
The Chief Executive Officer of Agent Banking Company of Uganda, Mr Richard Yego, attributes the drop to the effects of coronavirus.
“There is a 27 per cent drop in number of transactions in the second quarter of 2020 compared to the first quarter in 2020 due to Covid-19 effects, including the lockdown,” he says.
The value of monies moved through the platform dipped even further.
“There is a 28 per cent drop in transaction value in the second quarter of 2020 compared to quarter one in 2020,” Mr Yego says.
Value of transactions in quarter one 2020 (January to March) tallied at Shs6.9 trillion before taking a dive to Shs5.1 trillion in the second quarter.
This is despite the growth in number of active agents during the period, albeit slow paced compared to pre-covid-19. President Museveni embarked on gradual lockdown measures in March starting with schools before declaring a national lockdown at the end of March. Only essential workers were allowed.While bankers were rendered essential, their working hours were limited to operate from 9a.m to 3p.m compared to pre-covid-19 where some banks worked until 7p.m.“We recorded over 40 per cent drop in the number of agents opening to serve customers especially between April and May when we experienced total lockdown. During this period, public and private transport was shut hence making it cumbersome for agents to move to open their premises for business. Shopping malls/arcades were also closed for a while meaning that agents housed in these premises could not open for business,” Mr Yego says.Just like telecoms with […]
