Have you guys heard of this? Where your premises (e.g. shop) becomes an agent of a bank (e.g Equity bank)and you gain from commission. The mwananichi is allowed to deposit/withdraw at your premise.
What are your thoughts?

@hakunakusimamishahii...I don't this this is a very novel thing. In a previous life, doing some research with SACCOs of all sorts (farmers, civil servants, etc etc), a common term used was FOSA - front office service agency. Some of the Sacco's in Kenya sit on huge deposits (I think around 2005 the Kenya National Federation of Cooperatives indicated that SACCOs had deposits of about 20 billion)...anyway, I digress.

Some businesses like KPLC/Water companies/banks have at some points in time used either SACOO offices (or even CBO kind of MFIs) as FOSAs.

Another example is the arrangement between KPLC and various banks and Posta for bill payment - Posta is a FOSA for KPLC.

So the networks are there but sometimes the back end systems aere so discrete and electronic data transfer is not always seamless - for receiving payments it can work with an offline system (no risk). For making payments however (risk) systems have to be interconnected and real time to remove any fraud. So, for example if Ngamia Sacco office in Wajir is an agency for Equity bank, they need to ascertain the drawers balance, etc etc in a secure fashion. Of course we have existing mobile technology to check balances - but that is for the account holder - the same power cannot be given to an agency...

so there are all sorts of challenges when it comes to making payments. receiving payments is not such an issue...its making payments.

Pls also see the thread about M-Kesho (http://www.wazua.co.ke/forum.aspx?g=posts&t=7974) where I have speculated that only the more established M-Pesa agents can evolve into what you have brought up - but ONLY the more established, with high cash flow, ability to put in systems, etc etc

My understanding is that EB is rolling out this thing this week. Some agencies have already been approved.

Requirements
1. An incorporated company
2. Been in business for 1.5yrs
3. Active Bank Account
4. A shop

and knowing my friend, she aint one person who is very good at details so i am not sure the 'branding' is so critical during appraisal time.

I think its the same concept as was happening in Turkana or some remote village where they had to sponsor solar gadgets.

Agency banking will pose very many challenges to SACCOs and other FOSAs. You can imagine the muscle that banks pack in terms of capital and now a huge cost element has been eliminated by allowing them to operate branchless! Banks should now be able to offer loans at much lower rates (if ever!!)

I saw an article where opponents of the model say that it will kill the SACCO and MFI sector. But ideally, SACCOs and other MFIs should actually take this agency banking bull by its horns and offers bespoke services under the model! Towns where this model will be most lucrative will be (not an exhaustive list) Kisii, Kiambu, Thika, Meru (especially Meru) and others.

Petrol stations, retail oulets (mini marts) and large 'shopkeepers' can turn this into a big avenue to divest! Only, will they?

Guys,

The future of banking in Kenya is 'brickless'. It does not really matter in what form or shape it comes. Banking in Kenya has been so rudimentary that what is considered banking is NOT really banking. Banks have realised this and have realised that the CASH MANAGEMENT ( currently referred to as banking) is the most expensive and risky part of business. What now with the risk weighting introduced by CBK. They are simply getting out of this cash busines i.e deposits, withdrawals, cash transfers , security, bullet proof glass non sense! They will go into real banking which is basically LENDING and trade products. The only real cost here is risk of default! They can process your loan even in a mabati kiosk in Kirinyaga.

The main contender for the former 'banking' is Orange money, ZAP and M Pesa in that order. All payments below 100k will be done by these systems ( and you withdraw from any ATM). Any above that can be done via RTGS. Plastic money has been largely bypassed in this country but will conitnue to be used by the middle class elite like @Wendz

This is what I foresee, I work, get paid by my employer via EF/RTGS. An SMS alerts me that it is now time time to spend. I move money from account into M Pesa. I pay the askari, fuel, bread, milk etc. I use my Orange money to pay my rent and Sacco loans.Whatever remains, if any, I swipe the Debit card at Naivas... Since there is too much month after the money, I use my credit card to buy @Njunge and Mc Reggae a beer ndio nijenge jina.... When the next pay comes, I pay the Credit card via RTGS ( I am paying on the last day anyway so I cannot afford to lose time)only to realise that only one quater of my pay is available for Feb. Since I have to live up and keep my promise to Ms Kenya on the date, I walk to my SACCO and apply for a loan. It is approved and sent to my bank Via RTGS. I follow the same path in diminishing it. Half way through the date with Leona, Magigi shows up and pigas me bafu and hits on the lass. I get mad and drive off in a huff. In my haste, I rum into Djinn's Peugeot and I make a run for it. I then ram into the pavement and my wheel goes out. I call my Mecha and send him fare via M Pesa. I also pay for a break down via M Mpesa. The car needs a new front suspension. I pay via RTGS. The day I am driving it home, I get areested for overlapping. The cop does not believe my story about my sick kid. He knows I was avoiding spending fuel which I did not have. We 'sikizana' and I send him his take via M Pesa. Just when I thought I had made it home.. napata imefungwa.. sijalipa rent, I Sent it to the wrong number and believ you me, Djinn's lawyer has cought up with me coz some idiot witnessed and sent a text to the radio station... Damn how I long for the cash economy.. It was real you know...

@bwenyenye, nice piece.But don't you appreciate the safety of such 'paperless' system.Now you don't worry about pickpockets!

I think that this is the way forward.