The Effect of Agency Convenience on Financial Performance of Commercial Banks in Isiolo County, Kenya
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Date
2024-08-23Author
Dulacha, Amina Abdi
Rintari, Nancy
Kambura, Susan
Type
ArticleLanguage
enMetadata
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The purpose of this study was to determine the effect of agency convenience on financial performance of
commercial banks in Isiolo County, Kenya. A descriptive survey research design was used, targeting
Cooperative Bank, KCB, and Equity Bank, which control over 90% of authorized banking agents in the region.
The target population included 102 staff in Equity bank, 123 staff in Cooperative bank, and 80 staff in KCB
bank, which was a total of 305 banks. The study adopted the Yamane’s formula (1967) to result to a sample
size of 58 staff in Equity bank, 70 staff in Cooperative bank, and 45 staff in KCB bank, which was a total of
173 staff. Stratified sampling was applied to select respondents from the finance and accounts departments
of these banks. Data were collected via structured questionnaires and supplemented with secondary financial
data. The pilot research used a sample size of 10% for this investigation, with 17 respondents randomly
selected to fill out the survey in Meru County. To ensure the data was reliable, Cronbach's alpha was applied,
which measures internal consistency. The questionnaires included in this study underwent a validation
process to guarantee their content and face validity, as well as to gauge their overall quality. The analysis
revealed a significant positive correlation between agency convenience and the financial performance of
commercial banks, with a Pearson correlation coefficient of 0.751, indicating a strong relationship. The
regression analysis further confirmed that agency convenience is a crucial determinant of financial success,
as evidenced by its standardized coefficient (β = 0.304) and a highly significant p-value of 0.000. The study
concluded that agency convenience was a vital contributor to the financial performance of commercial
banks. The study concluded that banks that prioritized and enhanced the accessibility and ease of use of their
agency banking services had substantial improvements in their financial outcomes. It is imperative that bank
managers prioritize the convenience of agency services. This can be achieved by expanding the network of
agents to ensure that services are accessible in both urban and rural areas, as well as by leveraging digital
platforms to streamline transactions and reduce wait times. Enhancing the user experience through
technology will not only increase customer satisfaction but also drive higher transaction volumes, which are
crucial for financial success.
Citation
Dulacha, A. A., Rintari, N., & Kambura, S. (2024). The effect of agency convenience on financial performance of commercial banks in Isiolo County, Kenya. The Strategic Journal of Business & Change Management, 11 (3), 352 – 360. http://dx.doi.org/10.61426/sjbcm.v11i3.302Publisher
The Strategic Journal of Business & Change Management