Agency banking in nigeria pdf
The agent banking helps customers with several financial services through the use of a third party or agent. This was made possible as a result of using a licensed deposit taking financial institution or mobile money operator (the principal). Read more about the package in this PDF file: Agency Banking in Nigeria Pdf.
Agent banking platforms in nigeria
The Agent Banking in Nigeria, as at 11th February 2020, has a total of 1359 agents.
This technology made things easier for the customers to use. It also offers a secured light banking services such as payment of bills, cash deposit, BVN, fund transfer, cash withdrawal, airtime recharge and many more. The services are available for people within a community. It is secure and trusted, gradually gaining reputation in retail business outlets in communities.
The service was created to offer financial access to people without easy access to the main banking system in the country. In 2020, the national financial inclusion strategy proposed to reduce financial exclusion to 20%. The agent banking is part of the process for achieving this goal.
Agent banking outlets always serves as the location the under-banked persons, transactions are made easy. They’re owned by an entity or an individual who will offer payment services to the customer. This action earns them transactional income for the services being offered.
Agency banking business plan
In 2013, when the Agent Banking began, the Central Bank of Nigeria provided guidelines for its operations as well as management this new banking system. Many commercial banks have signed agents in order to help to boost their retail banking services after the introduction. FCMB revealed that it has over 500 banking agents, who are operating in different parts of the country as of 9th January, 2019.
The agent banking in Nigeria has gradually been gaining ground. You can diversify your revenue streams by becoming a bank agent if you already own a small business. This is almost guaranteed to bring you more daily income.
An agent bank is a person or entity that is not a direct employee of a bank but can deliver banking services on behalf of a bank. There is an agreed commission for using one’s personal premises and resources.
Check a template of a good business plan for the Agency banking here Agency Banking in Nigeria.
How lucrative is agent banking in nigeria
In Nigeria, the agent banking is gradually becoming one of the top businesses for individuals. It is lucrative. When you consider the cost of operation, it is relatively low.
What’s more? The demand for this service is everywhere. This means there will always be customers to serve.
So far, it has proven to be a profitable venture for most small business owners.
Challenges of agency banking in nigeria
Here are some challenges being faced while creating an effective agent banking model in Nigeria. They are:
- The relatively small number of installed POS machines and the lack of interoperability.
- The relative laack of interest amongst DMBs in taking financial services down market.
- And there are some KYC constraints.
Advantages of agent banking in nigeria
There are four key benefits for using agent banking in Nigeria. They are listed below.
The platform is easy to use. It allows agents deposit and withdraw money from their digital wallets with various businesses.
It is an agent-based operation. The system operates by using of agents to conduct transactions on behalf of the unbanked.
It is secured. A bank pin and a magnetic chip card are issued to bank customers. It is readable by the agent’s terminal – same for transactions cards. It is easy for agents to drive more customers through their shops. Customers can get more security when compared to other cash management systems.
It supports different transactions. The service supports several transactions. They include the voucher-less prepaid top-up, top-up prepaid voucher sale, loan repayments, cash deposits, account balance queries, merchant’s services, cash withdrawals, transfers and bill payments of various types like fines, government fees, taxes and others.
Agency banking model
The agency banking model is a function of certain commercial banks in Nigeria. The activity is regulated by the Central Bank of Nigeria, which allows banks to contract third-party retail networks as a Banking agent.