Stanbic turns back on agency banking

By James Anyanzwa

CfC Stanbic Bank has made a dramatic shift over the proposed agency banking model, which is being touted as key driver of financial inclusion in Kenya.

The bank’s parent company, Standard Bank of South Africa, said the group had no intention of adopting branchless banking model for any of its subsidiaries in the African continent.

The Group’s head of Personal Banking Business (PBB) Terry Moodley said the bank would, instead, deploy more direct sales agents and use banking cards such as automated teller machines (ATMs), debit and credit cards to reach out to its customers.                 

“We have no plans to outsource our distribution functions to agents. That is not in our plans,” Mr Moodley told Business Weekly in Johannesburg.

Agency banking allows commercial banks to use new outlets such as supermarkets, petrol stations, chemists, malls and mobile telecoms as agents.

The Government has initiated policies meant to increase the banked population in the country, currently estimated at 38 per cent of the potential adult population that should be holding accounts.

Commercial banks have gone into a frenzy to increase deposits, and are running promotions meant to attract more cash. These include Co-operative Bank, Kenya Commercial Bank, Eco Bank and Barclays Bank.

Banks have pitched on to agency banking, with some attributing their increased profits to the concept.

Equity, Co-operative Bank and Kenya Commercial Bank have rapidly spread their wings across the country by opening agency-banking points in far-off estates.

It remains to be seen how the local subsidiary of the Standard Group CfC Stanbic will wither the rising competition for deposits.