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High agency charges keep Kenyans in banking halls

By Metro Reporter and Xihnua

Some were standing in the long queue, others were seated on the few benches in the banking hall.    It was evident that the long queue in the bank in Nairobi on Monday was taking a toll on them. 

 

And the fact that it was moving at a snail's pace did not help matters. Most of the people in the queue were parents seeking to pay fees for their children who were going back to school.  

However, as they spent hours in the queue waiting to be served in the bank situated along Moi Avenue, several agents of the bank located on the same street and others in Nairobi were seated idle, waiting for customers.    A similar scenario was replicated in other banks around Nairobi, with many of them registering huge queues, thanks to back-to- school and end-month rush.  A spot check in at least four different commercial bank branches indicated that there were long queues in the banking halls.  Interestingly, those people in the banking halls could easily walk to agents, deposit, withdraw or apply for loans. Another alternative is to carry out the  transactions through m-banking platforms or mobile money.  

Nearly all banks in the East African nation have launched m- banking applications in the past months in bid to serve their clients better. But all these options seem unattractive to Kenyans, majority who throng banking halls to access the services over the counter.  The love for the banking halls has become legendary, with people spending hours in banks each day. 

  But why have Kenyans stuck to the traditional methods of accessing basic banking services like depositing cash yet they can comfortably do that through agents? "Agents are expensive, that is why I am not using them. There is a time I went to deposit cash through an agent and I was charged over 1.14 U.S. dollars, yet the same service is free when I do it inside the bank," recounted businessman David Korir.   Since then, Korir said he has to create time to deposit cash in the bank.
   "That 1.14 dollars that I will be charged I can use it to buy airtime or even milk for my children. They should make the agency services affordable if they want us to use them. Let them charge as low as 0.22 dollars."     Commercial banks in the East African nation charge a minimum of 0.57 dollars for transactions through their agents. The charges increase depending on the amount of money transacted.  As of June, according to the Central Bank of Kenya, there were 26,750 active agents in the East African nation working for both commercial banks and micro-finance institutions. 

The agents transacted 833 million dollars between March and June, up from 770 million dollars in the first quarter, with number of transactions rising from 11.8 million to 13 million.    Since the service was launched in 2010, the agents have transacted business worth 6.6 billion dollars. This growth is slow compared to mobile money, which transacted 13 billion dollars between January and June.
The high charges aside, many Kenyans also consider agents unsafe because some are located in seemingly risky places, especially if one wants to withdraw huge sums of money.  Many Kenyans also find m-banking
charges costly, with some banks charging 1.14 dollars per transaction. 

  "I do not like m-banking because you do not remain with physical evidence that you have carried out a transaction," said NGO worker Sally Boke.   Economics lecturer Henry Wandera, however, blames it all on lack of awareness. "Majority of Kenyans do not know how to use services like m- banking and even agents. Some are not even aware that the services exist. Banks need to carry out awareness campaigns on the services, besides making them affordable for people to stop thronging banking halls."

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