POS transaction


Agent banking – A roadmap to financial inclusion in Nigeria

Agent banking – A roadmap to financial inclusion in Nigeria

Agent banking – The growing need to make banking accessible to rural dwellers is giving birth to many dreams and innovations in the banking industry.

There’s a need to distort the modern banking process to at least make banking accessible to rural dwellers perceived as under banked and unbanked.

This guide will address so many questions bothering on agent banking, what it stands for, how it helps the common man, how it empowers small businesses and rural dwellers.

What is agent banking Nigeria?

This is the practice where independent business owners, offer banking services to consumers of banking products on-behalf of the bank without necessarily being employed by the bank.

On the course of rendering these services, they however operate within regulatory ambit to ensure compliance in operational process is maintained.

The essence of instituting agency banking is to deepen financial inclusion.

What is financial inclusion?

This is the practice that involves and ensures that people living in rural areas have access to financial services. They are mostly considered as the under-banked and unbanked.

You will agree with me that banking services are usually situated within major towns and cities, however lack presence in rural localities, which in turn leaves a good number of people without access to financial services.

You may also like: Send and receive money with MTN mobile money transfer

Financial inclusion is positioned to defeat and change this narrative in the most aggressive manner, Nigeria is gradually getting there.

Kenya is one of the leading countries in Africa to have adopt financial inclusion, which in turn makes access to financial services readily available to its citizens. You can talk about the Vodafone M-Pesa.

OPay is setting the pace in Nigeria alongside other super, middle and lower agents authorized by Central Bank of Nigeria through the Nigerian commercial banks.

To get a better appreciation of the concept agent banking in Nigeria, kindly see the below scenario.

Example 1.

Assuming you travelled to your village for whatsoever reason,  you suddenly have a reason to access cash having exhausted your wallet.

Eventually, there’s no bank or ATM of any kind in your village, not even in the nearest neighborhood village.

While you stopped a bike man to intentionally enquire if you can access any cash center or ATM around, despite being aware there isn’t any, the bike man quickly made reference to a grocery shop at the heart of your village, ensures you Okechukwu will have a solution to your need having seen him do that in the past.

On your arrival, Okechukwu enquired how much you’ll like to withdraw, sequel to your response, there comes a POS machine handy and was asked to slot your ATM card so you can effect a withdrawal, in less than two minutes you’re done and value given to you in cash by Okechukwu.

You were so delighted.

This is what agency banking entails, the service you received and circumstances surrounding it is the bedrock upon which agent banking is being instituted.

Services rendered by agent banks are numerous, not restricted to cash withdrawals alone.

Who is an agent bank/banker

This is business or shop owner who renders agent banking services.

From the illustration above, Okechukwu is an agent banker, while his shop/terminal in which he renders this service is the agent bank.

Services rendered by agent banks

You can virtually access a handful of services rendered by the banks themselves at the agency bank locations. Such services include but not limited to:

Ø  Account opening

Ø  Cash deposit

Ø  Cash withdrawal

Ø  Bills payment

Ø  Local money transfer to mention just a few.

Advantages of agency banking in Nigeria

The possibilities agency banks have created in recent times cannot be underscored in any way. They offer the following advantages:

Ø  Income stream for agents/employment – Agency banking creates an avenue for the agency bankers to earn additional revenue from their business location by rendering financial services to the unbanked. They usually earn commission per transaction.

Ø  It deepens financial inclusion – The aged in localities can now have access to funds without hassles, unlike the usual practice of travelling a long kilometers to make withdrawals in neighborhood towns.

Ø  Eliminates financial risk/theft – The possibility of getting rubbed at the ATM point, or on transit having travelled a far distance to make withdrawals is highly reduced.

How to become and agent banker

You are however expected to meet certain criteria before you qualify to be an agent.

Ø  You ought to have been operating a business for at least one year

Ø  Your business location must pass eligibility test, considered suitable with reasonable customer traffic

Ø  To qualify as an agent, you should be a limited liability company, sole proprietor, corporative societies or running a corporate account with the bank.

This means that you must be operating with a bank already, approach your bank and get their requirements for agency banking.

They will on your behalf apply to CBN for approval having ascertained you’re suitable for the business. On approval, the bank will make agency equipment available to you, this include:

Ø  POS terminals

Ø  Card readers

Ø  Mobile phones and

Ø  Bank linked mobile wallets for transaction processing.

You may also like: How to become a Firstmonie agent in Nigeria

How agency banks make money

An agent is entitled to a commission per transaction treated, this is why established businesses like pharmacy, grocery stores, super markets, filling stations, hospitals are recommended for this services.

Your income depends on your traffic, as well how often your point is being used for agency banking services.

List of agency banks in Nigeria

Ø  Firstmonie

Ø  Africamamaatm

Ø  MTN mobile money

Ø  Inlaks

Ø  247cash

Ø  Aella Credit

Ø  Amplify

Ø  AppZone

Ø  Cassava

Ø  ChatPay

Ø  Access agency bank

Ø  FCMB agency bank

Ø  Zenith bank agency bank and many more

Cons of agent banking

With the growing number of agency banking in Nigeria, it’s a no brainer to understand that the Nigerian commercial banks may have to do with less staff, invariably lay off workers except for customer management and real time human needs in banking services.

It does implies that unemployment may sky-rocket in the nearest future within the banking industry. Courtesy of technology and innovation.


Agent banking is surging aggressively in Nigeria, the rural dwellers and unbanked are beginning to let a sigh of relief. The seamlessness it conveys cannot be over emphasized, however, it can only get better.


2 comments on “Agent banking – A roadmap to financial inclusion in Nigeria

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