Industrialization And Employment Generation in Nigeria: An Empirical Analysis

The global business environment is undergoing significant changes marked by intense competition, and the banking industry is no exception. In response to these dynamics, commercial banks are increasingly embracing innovation, with agency banking emerging as a notable addition. This study explores the determinants of financial performance in agency banking in Kenya. The theoretical framework guiding this investigation incorporates agency theory and competitive advantage theory. The study identifies key influencers of agency banking performance, such as financial service accessibility, transaction costs, market share, and compliance with Central Bank regulations. Financial service accessibility is crucial in fostering financial inclusion, especially in rural areas, and has positively impacted deposit levels. Transaction costs have significantly decreased, enhancing the viability of small-scale transactions and serving the previously unbanked. Market share is explored as a determinant of profitability, with a larger market share providing institutions more control over services and pricing. The study also emphasizes the role of Central Bank regulations in ensuring the safety of financial transactions conducted through agency banking. This study aims to contribute to the understanding of the determinants of financial performance in agency banking in Kenya, offering insights that can inform strategic decision-making in the dynamic landscape of modern banking.