Mobile Money had sneaked out of the banks’ proximity, and we thought all could be done for the banking institutions. Well, they have re-invented themselves in way that makes them operate lean, fast and everywhere; and in an effort to increase financial inclusion as well as to enable spread and penetration of banking services, the Uganda Bankers Association (UBA) recently launched the Shared Agent Banking System.
In March 2017, the Association signed a partnership agreement with Eclectics International, a technology firm to implement the Agent Banking approach through a shared platform and agent network management.
To begin with what Agent banking is: An extension of banking services outside the conventional bank branches, where a licensed and supervised financial institution contracts a third party operator known as an agent, who is approved by Bank of Uganda, to provide permitted financial services on its behalf.
The main goal of Agent Banking project will be to establish a country wide inter-operable agent network and agent banking platform that connects all UBA member banks across the country.
That known, the Shared Agent Banking System is an initiative of the Uganda Bankers Association that enables connectivity between member banks to enable agents serve customers of any other member bank to minimize duplication of agency networks and increase/maximize points of presence to ensure coverage across the country.
7 banks are already connected on to the system including Stanbic Bank, Barclays Bank, Bank of Africa, Diamond Trust Bank, DFCU Bank, Housing Finance Bank and GT Bank. 14 additional Banks are at different stages of the integration process and securing the necessary regulatory approvals.
What does Shared Agent Banking System seek to solve?
1. Lack of access to financial services: This project aims to increase access to financial service points for all 19 million Ugandan adults in the short run and ensure that every Ugandan has banking access within a 5Km radius.
2. Exclusion from the banking system: The project is designed to help banks roll out affordable services to clients via a trained agent network thus reducing the ‘banking inequality’ that exists in the country.
3. Customer choice: The project aims at expanding the customer choice basket.
4. Competition: To increase competition between banks and non-banks which not only increases competition in the market but also deepens the per capital financial service penetration.
As noted by Mr. Richard Yego, the Ag. CEO Agent Banking Company, an agent can be a petrol station, a supermarket, a permanent mobile money agent, a pharmacy, a retail shop or hardware store that is fully licensed and has been existence for one year.
What can an Agent do?
• Cash Withdrawal
• Funds transfer
• Cash Deposit
• Collection of documents.
• Bill Payment.
• Balance inquiry
• Mini Statement
• Loan application approval
• Account opening initiation.
What is an agent not allowed to do?
* Carry out a transaction when the system is down.
* Charge fees directly to customers.
* Undertake cheque deposits.
* Distribute cheque books, ATM cards or PIN mailers.
* Conduct foreign exchange transaction.
* Sub-contract other persons to provide agency banking services.
* Grant loans or advances or carry out appraisal function for purposes of opening an account.