agency banking

Agency Banking in Kenya

Agency banking in Kenya is the new way that banking in Kenya is using to take banking services to the unbanked and under banked at a cheaper rate. The banks are training agents who will engage in banking services on behalf of the banks.



Agency banking is not new in the world. It has been used very well in Latin America and Asia. There are few African countries that have taken up agency banking. The agency banking in Kenya guidelines were enacted in 2010. Banks must first apply to central bank of Kenya to get approval to conduct agency banking business. The board of directors of each banking institution interested in agency banking must make policies guidelines and procedures to be followed to ensure that:



  • the agents are credible,
  • risk identification and mitigation measures are in place and
  • Agents are audited on an ongoing basis to ensure that the Agents follow the guidelines from central Bank, their contracts and the banking policy.

Agency banking in Kenya requirements

Agents must also through the banks that sponsor them apply to run agency banking in Kenya business. The agency banking network approval requires the following conditions to be met, together with completing the Agency Banking Network application form.

  • The proposed or expected number of agents in each province for the next three years
  • The banks must produce a report of the due diligence policy and procedures for their agencies
  • The service that the agency would provide on behalf of the bank
  • The draft generic agency contract
  • The policies, procedures and the technology the bank will apply and use at the agency outlet
  • Risk management and mitigation policies in place
  • Internal controls and audits performed prior to agents engaging in agency banking
  • Policies on anti-money laundering
  • Additionally the bank provides their channel, growth and business strategy for agency banking and how it fits in with the overall global strategy of the bank.

The application form for Agency banking is accompanied by a non-refundable fee of Kenya shillings 5,000. Where an application has been rejected, central bank responds to the applicant within thirty days of having received the application form the bank. After the conditions have been met, the bank can resubmit their application to central bank.

Agency banking in Kenya application

An agent application form is also sent to central bank for approval before the agent can start transacting on behalf of the bank. A fee of Kenya shillings of 1,000 per agent is required. An application is renewable annually and the fees are payable yearly. Details included in the forms include:

  • Agent Name
  • Location, postal addresses and telephone contacts
  • The business the agent carried out for the last eighteen months
  • The banking services that the agent will handle on behalf of the bank
  • Confirmation or declaration from a senior member of the prospective agency stating the minimum qualifications required have been met.

Agency banking in Kenya approved activities.

Activities that the agency can engage are determined by the bank after assessment of the agency.  The agency does not have to perform all the activities. These include but are not limited to:

  • Cash withdrawal and deposits
  • Repayments of loans
  • Bills payment
  • Salary payments
  • Funds transfer
  • Balance enquiry
  • Document collection for debit and credit cards, loan applications and account opening forms
  • Cheque book requests and collection
  • Collection of bank correspondence and mail
  • Mobile banking services

Agency banking transactions are denominated in Kenya shillings.

Activities prohibited for agency banking in Kenya

Some activities are prohibited and are listed below. When an agency continues to perform prohibited activities, their contract may be terminated. The list below is not exhaustive.

  • Perform and carry out transactions when the networks and communication failure is experienced. The transaction must have acknowledgement or receipt.
  • Charge customers any fees
  • Carrying out agency banking business when agent is no longer a going concern
  • Offer its own banking services apart from the sponsoring bank
  • Anti-money laundering services
  • Foreign exchange transactions
  • En-cashing and depositing of cheques
  • Provision of cash advances and loans
  • Subcontracting to any business to run its agency banking
Agency banking in Kenya termination of services

A bank or central bank may terminate an agency contract. The bank that had registered the agent must inform the general public by posting the most appropriate notice around the premises or vicinity of the agent. A contract for agency banking may be terminated when the agent:

  • When the agent is no longer a going concern
  • The agent suffers damage or financial loss that is not remedied after three months
  • is involved in criminal activities, fraud and financial mismanagement
  • is declared bankrupt by the courts and is being wound up
  • death of a sole proprietor or mentally incapacitated owner
  • has expired business licences
  • violates the provisions of the agency banking guidelines or the terms of the contract with the bank

Many Banks have started Agency Banking in Kenya and have trained the agents so as not to affect the service they offer to their customers.



Leave a Reply

Your email address will not be published. Required fields are marked *