Abstract:
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 banks withdrawals in commercial banks in Kenya. The study was guided by the theory of diffusion of innovation. 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.
Key words: Agency Banking, Bank withdrawals and Commercial banks
