Challenges and Prospects of Agent Banking In Ethiopia: the Case of M-Birr and Cbe-Birr

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Addis Ababa University


The aim of this research is to discover factors and challenges that are affecting the development of Agent Banking in Ethiopia, and develop a model that describes the factors with technology acceptance model (TAM). In addition the study tries to determine agent banking level of penetration or accessibility in Ethiopia and its prospects. In this study mixed approach is used to answer the research questions and accomplish its objectives. Purposive sampling is used to select participants for the interview and two concerned and knowledgeable staffs form CBE-BIRR and M-BIRR are selected. Questionnaire is used to collect data from customers of five branches of commercial bank of Ethiopia who are active users of additive mobile banking (mobile banking service which is linked with customers’ bank account). The result of the research identifies different factors grouped in five constructs of technology acceptance model. These factors and sub-factors are Perceived Economic factor (Cost of using bank account), Perceived usefulness (Actual /practical benefits) Perceived ease of use (illiteracy, Awareness, mobile network quality), Perceived Trust (trust to the bank, trust to the agents, trust to the technology), Perceived Risk (Vulnerability to Errors and Vulnerability to Hackers). Finally a model is designed using Smart PLS Version 3.2.7. Challenges regarding development of agent banking are also discussed with service providers and agents. To this end, different challenges are raised and discussed during the interview including awareness of customers and agents, availability of limited services, NBE regulations and limitations, lack of budget, poor advertisement, illiteracy and mobile network quality. Based on the results of the study the researcher recommends the following points to improve current performance of agent banking i.e. developing new channel for illiterates, availing new and additional services, proper advertisements and the need for more effort on improvement of the actual benefits.



Agent Banking, CBE-BIRR, Financial Institution, M-BIRR, Technology Acceptance