Abstract:
The purpose of the study was to investigate the impact of conflict of interest in agency relationship in financial institution a case study of Narok County. The specific objectives of the study were: To identify the effect of Agency relationship on branch set up costs at Narok County ,to find out the effects of Agency relationship on service delivery, to investigate the effects of Agency relation hip on credit access and to determine the challenges of Agency relation hip on profitability of financial institution at Narok County . The study will be of great significance as it will help financial institution to know more challenges affecting Agency relationship and take corrective measures to improve the business. The study used a case study research design, where the target population was 30 respondents. Census research method was used in the study and the sample size was 30 respondents. Questionnaires were the main instrument used to collect data and then data was analyzed using descriptive statistics and presented using frequency tables and percentages. From the findings it showed that Agency relationship is effective in set up cost as it lowers the set up cost in the organization, Agency relationship lowers the running cost within the organization Agency relationship minimizes fixed costs and Agency relationship lower the acquisition costs within the organization. From the findings results showed that Agency relationship may lead to financial crisis , agents lack capacity to handle large transaction of cash, agents faces security measures challenges, the host bank face constituent to supervise and regulate agent and the lack of expert training may be a problem in dealing with cash in cash out transaction. From the findings result showed that majority of the respondents agreed that Agency relationship may lead to financial crisis .
