How important is an agent banker in the rural banking sector ? - teknospire
Financial inclusion for rural people

Financial inclusion for rural people

In continuation to our earlier blog ”Benefits From Agency Banking”, this blog would highlight the importance of agent bankers in rural banking.

For a country to be fully developed rural development has to take place. Of late rural development has become the new buzz word for the developing economies. The central government bodies, local government bodies and the financial institutions in these economies are the primary development providers to the rural areas and its residents. While the local authorities are developing the rural areas with better infrastructure facilities, the financial institutions are following suit by providing financial inclusion to the rural residents.

Currently, huge chunk of the rural population are unbanked and prefer to remain unbanked due to reasons such as :-

  • Lack of banking awareness
  • No banking need
  • Banks having an intimidating presence
  • Limited bank presence in the particular rural area owing to high operational costs
  • Distance to be covered to reach the bank
  • Unsafe travelling conditions
  • Lack of technological awareness

Financial institutions especially rural banks of the developing economies play a crucial role in the rural financial development. To ensure a successful rural financial development, the rural banking sector needs to grow by laying
thrust on :-

  • Sustainable community- focused banking
  • Networks value
  • Providing advanced banking solutions apart from basic banking solutions
  • Creation of banking awareness amongst the rural population
  • Lower cost of reach

Supporting their growth, the rural banking segment is opening up to policies that promote financial inclusion. Rural banks are steering away from traditional branches and are looking forward to alternative forms of banking to provide financial inclusion. A few steps taken by the rural banks in enhancing their development include :-

  • Use of intermediaries, in-house or contract agent bankers and not their own staff or branch networks. The agencies employing agent bankers are postal outlets, retail outlets such as groceries stores, pharmacies, petrol pumps.
  • Providing doorstep banking using latest technology and agent bankers.

 Customer service point /Agent Bankers
Customer service point /Agent Bankers

Scope for rural banking sector development through rural financial inclusion has given rise to agency banking. But how important are the agent bankers to the rural banking sector? Agent bankers help in stepping up the success of thrust areas laid above. Also, they enhance financial inclusion of the unbanked by :-

  • Being delivery channel in providing basic banking facilities like deposits, withdrawals, remittances at the doorstep or at a place closer to rural population than the banks.
  • Offering banking services in a low-cost manner which wouldn’t be possible for the rural banks.
  • Ensuring 24*7availability unlike rural bank branches that work for limited hours in a day.
  • Providing accessibility to bill payments and other utility payment facilities.
  • Educating about the need for banking and its advantages in a more efficient way than the banks.
  • Exposing the unbanked to various banking forms using technology such as mobile banking.

 Mobile Banking In Rural Areas
Mobile Banking In Rural Areas

  • Increasing the customer base for the banks by signing up new customers using their wide social contacts.
  • Developing a good rapport with the customers and urging them to make frequent use of banking services with confidence. A branch seems intimidating to the rural people and would not provide the same comfort level.
  • Using cost effective technology for their transactions help the rural banking sector to be tech savvy. Such as the agent bankers banking suite and mobile money suite used by the Ndasenda’s agents for their transactions.


Agent bankers by providing benefits to the rural banks and the rural customers,have attained a prominent place in the rural banking sector and their importance in the rural development cannot be overlooked.


International Journal of Management Research and Business Strategy
Diversified Channels in Rural Banking Worldwide
Agent Banking: Penetrating Markets, Rural Communities For Financial Inclusion