In the wake of the COVID-19 pandemic, the income for both rural- and urban-based agents has significantly reduced in Uganda because the transactions have significantly reduced.
Customers cannot travel due to the travel restrictions and they are not transacting as much. With the advent of shared agent networks, Ugandans can now easily access banking services irrespective of which agents they visit. These agents can serve customers from several institutions and are able to do more business. Agency banking is the delivery of financial services outside conventional bank branches through sub-contracted vendors known as bank agents. A licensed financial service provider contracts a third-party operator (the agent) to provide a range of financial services on behalf of the financial service provider (the principal). We at MSC, are proud to have supported many of the leading banks in Uganda to develop and deploy agency networks. Considering the massive investment required to set up and manage agency banking structures, Ugandan Banks -under their umbrella association– the Uganda Bankers’ Association (UBA)– agreed to set up a shared agency network.
The shared agent network operates on a platform jointly owned by the UBA and Eclectics International (a technology service provider)and managed by the Agent Banking Company (ABC).In January 2016, the Ugandan Parliament approved the Financial Institutions Act (Amendment) 2016 and thus paved the way for agency banking in Uganda. Furthermore, with the advent of shared agent network Ugandans can now easily access agency banking services irrespective of which providers’ agents they visit.
As of February 2020,13 banks[1]are on ABC’s shared agent platform. As of September 2019 , there were 9,477 shared agents spread across the country. These agents facilitated an average of 2.15 million transactions monthly. Agents on the shared platform can facilitate deposits, withdrawals, utility bill payment, open accounts, do balance inquiries, provide mini statements, and handle school fees payments.
Benefits of the shared agent network
The key benefit for the participating banks that shared agent networks bring is the cost-saving. The banks have saved on the investment required to set up their individual agent networks. The costs of setting up and managing agent networks include the hardware (point-of-sale devices, smartphones, and blue tooth printers), recruitment and onboarding, and training.
The shared agent network in Uganda rides on existing networks of some of the largest financial service providers (in terms of outreach in the market) and hence is able to expand the network’s presence and increase transactions. […]
