Agency banking and financial inclusion in commercial banks in Uganda, a case study of centenary bank, Najjanankumbi branch.

Abstract

The study was about impact of agency banking on financial inclusion in commercial banks in Uganda with Centenary Bank, Najjanankumbi Branch as the case study. The objectives of the study were; to find out the relationship between transaction costs and financial inclusion in Centenary Bank, Najjanankumbi Branch, to establish the relationship between geographical coverage and financial inclusion in Centenary Bank, Najjanankumbi Branch and to assess the relationship between convenience levels and financial inclusion in Centenary Bank, Najjanankumbi Branch. The study employed a cross-sectional survey design using mixed methods (questionnaires, interviews, and documentary review) to investigate agency banking and financial inclusion at Centenary Bank, Najjanankumbi Branch. Data were collected from 80 participants, including bank managers, employees, supervisors, agents, and clients. Both quantitative and qualitative approaches were used to ensure comprehensive and reliable findings. Out of the 80 individual members in the population of Centenary Bank, Najjanankumbi Branch that was sampled, 66 was chose to form a sample using Yamane formula. Data was collected using self-administered structured questionnaires and face-to-face interviews. Questionnaires focused on key constructs of financial inclusion using a Likert scale, while interviews provided qualitative insights to complement and clarify the quantitative findings. Data was analysed using descriptive statistics in order to summarize data in a meaningful manner using SPSS, 20 versions. The study found out Regression analysis revealed weak but statistically significant positive relationships between financial inclusion and three factors: transaction costs (R = 0.104, p = 0.004), geographical coverage (R = 0.091, p = 0.000), and convenience levels (R = 0.158, p = 0.004). Each factor contributed minimally to explaining variations in financial inclusion (R² < 3%). Despite low explanatory power, all three factors meaningfully influence financial inclusion and should be optimized to improve access to banking services. The study found weak but statistically significant positive relationships between financial inclusion and transaction costs, geographical coverage, and convenience levels at Centenary Bank, Najjanankumbi Branch. The study recommends that financial institutions adopt tiered fee structures, expand digital and agent banking, and enhance service convenience to boost financial inclusion. Policymakers and regulators should promote transparency, enforce consumer protection, and incentivize rural financial outreach. Collaboration with telecoms and community organizations is key to improving infrastructure, digital literacy, and service adoption in underserved areas.