Abstract:
Agency banking model has been successful in propelling financial inclusion in Kenya. Success stories have
been reported in Kenya. Agency banking has contributed to increased access to banking services from 41.3%
of the country’s bankable population in 2009 to 79.6% in 2018. However, despite this achievement the
financial performance of commercial banks in Kenya has been on a downward trend. Therefore, the overall
objective of this study was to determine the effect of agency banking adoption on bank deposits in
commercial banks in Kenya. The study was guided by the theory of financial intermediation. The study
adopted an exploratory non-experimental research design. The study used secondary data and the nature of
the data collected was quantitative. The data targeted 15 commercial banks that were licensed by Central
Bank of Kenya to carry out agency banking as of December 2014, however one commercial bank (Chase
bank) was put under receivership during the period of study and therefore it was excluded from the study.
The data was collected from CBK banks supervision annual reports and from financial reports of the 14
commercial banks using a data collection worksheet and analyzed using descriptive and inferential statistics.
The empirical model of the study was based on Event study. This study is expected to provide information on
the effect of agency banking adoption on the financial performance of commercial banks in Kenya.
