In the last decade, there has been an explosion of different forms of remote access financial services, i.e., beyond branches. These have been provided through a variety of different channels, including mobile phones, automatic teller machines (ATMs), and point-of-sale (POS) devices and banking correspondents. Agency banking is the latest in this series of technological wonders in the recent past involving use of mobile device, most often a mobile phone for delivery of banking products & services. This study was conducted in 32 bank agencies representing 3 banks i.e. equity, KCB and Co-operative bank in Thika Municipality. The main objective of the study was to determine the effect of agency banking on the performance of bank agents business. The study adopted a descriptive research design. The population of study was 32 agencies in Thika municipality both qualitative and quantitative data was collected by use of questionnaires with both open and close ended questions, The questionnaires was provided to respective owners/managers of the 32 banking agents in Thika Municipality. Data was analyzed using descriptive statistical tools including graphs, frequencies percentage charts, mean and standard deviation. SPSS (statistical package for social sciences) model was used in data analysis. The study used linear regression model to analyze the relationship between the independent and dependent variables. The study established a head start in licensing has created concentrated monopoly in competing banks thus loss of other agents business in the process. The study established that it is not easy to maintain adequate cash and e-money float balances to meet customer cash-in/cash-out requests all the time may discourage clients from frequenting the other business. The study revealed that lack of in depth knowledge and modern skills of banking industry has affected speedy growth of the agency banking and the other business they operate. The study established that the number of people coming into their store changed after you became an agent. The study recommends that the government subsidizes the agency banking sector to help compete more favorably with the mobile money transfers. The study also recommends that the government offers support to the agencies in form of offering security officers. The study further recommends that the banks should meet the costs of painting each and every agents premises.

Key Words: Agency Banking, Performance

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