The Role of Agent Banking in Unlocking Financial Inclusion in Tanzania
Abstract
The study conducted in the Mwanza region of Tanzania aimed to assess the influence of agent banking technology on banking service delivery. It focused on three key aspects: the simplification of banking services, the relevance of the technology, and the affordability of bank charges associated with agent banking. Employing an exploratory research design, the study targeted commercial banks in the Ilemela and Nyamagana districts. Participants knowledgeable about agent banking technology were chosen through convenient and purposive sampling, resulting in a sample of 215 bank customers and 52 bank employees. Data were collected using a structured questionnaire and analysed statistically via descriptive and inferential statistics using SPSS. Descriptive findings revealed that 42.3% of respondents agreed that agent banking simplifies banking activities, while 42.8% found it relevant to their banking needs. However, 29.8% strongly disagreed that transaction charges were fair and affordable. Additionally, 45.1% believed agent banking technology was simpler than other banking methods, and 48.6% considered it user-friendly. Meanwhile, 38.6% agreed that it provided reliable and affordable internet connectivity. Inferential results indicated a significant influence of agent banking technology on service delivery. The Likelihood Ratio Test yielded a value of 30.243 with p=0.037, demonstrating a 32.2% variation in banking service delivery due to agent banking usage. ANOVA analysis indicated statistical significance (F (1, 213) = 5.838, p = 0.017). Furthermore, Chi-square results suggested an association between agent banking technology usage and banking services delivery. Overall, the study highlights the positive correlation between agent banking technology usage and improved banking service delivery in commercial banks of which enhance financial inclusion in Tanzania.
Keywords: agent banking, banking service provision, quality of banking services, banking services, financial inclusion.
DOI: 10.7176/EJBM/17-4-13
Publication date: May 30th 2025

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