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Agent banking is a business of providing banking services to the customers of a bank
or a financial institution on behalf of that particular bank or financial institution
under a valid agency agreement. Since launched in Tanzania in the year 2013, agent
banking has seemed as a successful channel for improving commercial banks’
market shares, financial performance, profitability as well as promoting financial
inclusion. This study aimed to examine the impacts of agent banking on profit
maximization to commercial banks in Tanzania, using a CRDB Bank PLC as a case
study from the year 2014 to 2018 while focused on factors such as total numbers of
agent branches and the value of transferred money i.e. total values of cash deposits
and withdraws.
The research conducted is a quantitative research whereby a case study design and
descriptive survey design was used to examine the impacts of agent banking on profit
maximization. To achieve the objectives of the study, the researcher used secondary
data and information such as a number of agent branches, the value of agent banking
deposit and withdraw transactions and the Net profit before tax were collected from
financial statements, annual reports, supervisory reports, etc. The descriptive
analysis, Pearson’s correlation analysis, and regression analysis techniques were used
to analyse the data collected.
The findings indicated a statistically insignificant positive relationship between agent
banking and the profit maximization of the CRDB Bank Plc. That increasing in the
number of agents banking branches and increasing in agent banking withdraw
transactions have positive impacts to profit maximization of the commercial banks,
as in accordance with the results of the study both two factors impacted the profit
maximization by 20.6% and 11.2% respectively. Also, the study found that the agent
banking deposit transactions impacted negatively profit maximization by 33.4%. |
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