DETERMINANTS OF AGENCY BANKING (CBE-BIRR) IN COMMERCIAL BANK OF ETHIOPIA, EXPLORATORY STUDY

Abstract

The purpose of this study was to assess the determinants of CBE-birr agent banking being applied by commercial bank of Ethiopia. The researcher has utilized exploratory study in nature. The population of the study consists of the Commercial bank of Ethiopia kirkos district in general consisting 90,152 users under 49 branches as of Jan. 2021 reported by CBE. A sample of 398 customers selected. Semi-structured questionnaires with close-ended and open-ended questions, interview questions and focus group discussion were used as data collection methods. The data collected was analyzed by using stata 13 and SPSS (Statistical package for social science) 20. Descriptive statistics consisting means, standard deviations were used while for inferential statistic the researcher has used ordinal logistic regression. The research findings have shown that demographic factors have been observed as statistically significant determinants for participating in CBE-birr. Specifically, age, marital status, income, family size has been proven to be determinants. Technological challenges have revealed that poor mobile network, incompatibility between systems, lack of convenience and fear of use as major ones. The ordinal regression has also proven that technological factors have significance effect. Organizational factors as well, have significance effect as lack of trained personnel, lack of enough operators, lack of awareness on directive and usage have been stated. As per to the environmental factors commitment level of stakeholders, cost expensiveness and technical support have been listed as main challenges. The results led to the conclusion that demographic factors have significance effect on participating in CBE-birr. Technological, organizational and commitment level has significant effect. It has also been noted that the commitment level of other stakeholders has been low. The researcher has recommended that agency related laws and directives needed to be given and aware to the staff, agents and customers. With such act the bank can work on its trust around the stakeholders. the bank must adjust the system failure and incompatibility problem. Additionally, organizational and environmental factors must also be solved. Provision of sufficient and quality personnel, proper, timely monitoring, need to be done on agents and also by NBE supervision team regularly. Intensive and widespread marketing effort must be undertaken supported with understanding the stiff directive set by all the stakeholders involved.