Effect of Agent Selection on Growth of Commercial Banks in Eldoret Town, Kenya

Abstract

The role played by agent banking in enhancing commercial banks' effectiveness cannot be underestimated. This study established the influence of agent selection on growth of commercial banks. The study was anchored on growth theory, Diffusion of Innovation Theory and Institutional Theory. The explanatory research design adopted. Target population were 1230 agency banking officers. The sample size was 162 agent banking officers stratified random sampled. A structured questionnaire was used to collect data. Standardization of research instruments were done by use of factor analysis and reliability determined using Cronbach's alpha coefficient. Validity tested through expert judgement. Data collected was analyzed by descriptive and inferential techniques. There is a significant positive influence of agent selection and growth of commercial banks (r =0.755, p=0.000). The selection of agents become thorough the growth of commercial banks improved.  Commercial banks through the Central Bank of Kenya should allow agents in cross- selling additional financial products such as giving out loans, opening savings account for the customers and managing the customer accounts as this would increase the overall profitability of the commercial banks.