EFFECT OF AGENCY BANKING ADOPTION ON CUSTOMER RETENTION IN KCB BANK: A CASE STUDY OF KIAMBU COUNTY, KENYA
Abstract
The introduction of agency banking is intended to expand access to financial services, particularly in rural areas where it has been expensive for banks to sustain a presence, owing to the smaller volumes. The general objective of the study was to examine the factors affecting the adoption of agency banking by bank customers in KCB bank in Kiambu County. The specific objectives are; to look at how the cost of agency services, security of agency banking, customer awareness and availability of capital affect the adoption of agency banking by bank customers in KCB in Kiambu County. The dependent variables were the level of the client of awareness, increase uptake of agency banking indicated by the amount of cash deposit, the volume of withdrawal by customers, and overall commission earned by the agent and the total number of agents. The research embraced a descriptive study design. Stratified random sampling was used to select a random sample of 120 agents of KCB. The research used questionnaires to obtain data which was analyzed by use of inferential and descriptive statistics. The study found and concluded that Cost of Agency Services, Security of Agency Service, Customer Awareness and Capital Availability significantly influenced the Adoption of agency banking by bank customers at KCB in Kiambu County. The findings revealed that there was a negative and significant association between agency cost and agency banking adoption. The findings also revealed that there was a positive and significant association between agency security and agency banking adoption. The findings also revealed that there was a positive and significant association between customer awareness and agency banking adoption. Lastly, the findings revealed that there was a positive and significant association between capital availability and agency banking adoption.The study recommended that enough security measures should be put in place as a result of the rampant cyber crimes and studies to be done in other areas of Kenya to establish whether the findings can be generalized.
Key Words: Cost of Agency Services, Security, Customer Awareness, Availability of Capital, Agency Banking
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DOI: http://dx.doi.org/10.61426/sjbcm.v5i4.890
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