FACTORS AFFECTING PERFORMANCE OF AGENT BANKING SYSTEM: THE CASE OF UNITED BANK S.C, ETHIOPIA

This study has sought to determine the factors that affect Agent Banking (AB) adoption in United<br> Bank Share Company in Ethiopia. In seeking understanding of the subject area theoretical and<br> empirical review were made and conceptual model was developed to measure those factors that<br> were identified in the theory. The study employed a mixed (both qualitative and quantitative) survey<br> to assess the factors affecting performance of Agent Banking. Method of data collection is based on<br> primary source. A purposive sampling technique was used for selecting interview respondents and<br> a census sampling technique was used for questionnaire respondents.<br> Descriptive statistical tools and reliability test, factor analysis, correlation and linear<br> regressions were used in analyzing the data collected. The findings of the study revealed that the<br> main factors affecting the adoption of agent banking in the bank in a positive way are:<br> technological factors like that of customers’ trust and security issue of the system, organizational<br> factors such as the needed attention for the system so that full awareness is created among<br> customers and external Environment factors in the form of transaction limit, lack of sufficient<br> government support and limited infrastructure development. From the findings, it can be<br> recommended that the bank, among others, to pay the required attention to the new technology<br> driven banking delivery system by creating awareness, working in unbanked areas and help<br> agents while they face operational failures and give refreshment training and follow up. The<br> government and regulatory organs should also give support to the banking industry and stand by<br> them whenever policy interventions are required. In such away, the banking industry can develop<br> customer base expansion, benefit from technology based competition in the form of cost<br> reduction, awareness creation, credibility, security, ease of use, and availability to exploit the<br> untapped potential of this banking product.