How does agent banking work in Uganda? Everything you need to know

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In this blog post, we reveal to you how agent banking in Uganda and some parts of Africa works.

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Have you ever dreamed of working in a bank? But for a reason or two, you lack the academic qualifications to do so. Good news for you! You can become an agent banker! It does not just end there. Instead of only working for one bank, you get to work as an agent for more than one bank at the same time. All you need are the right resources – not academic qualifications!

Agent Banking has grown to about 9,477 agents spread across Uganda since it was launched — according to Bank of Uganda deputy governor Louis Kasekende. 

What is agent banking?

Agent Banking means providing limited-scale banking and financial services to the under-served population through engaged agents under a valid agency agreement, rather than a teller/cashier. It is the owner of an outlet who conducts banking transactions on behalf of a bank.

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Benefits of agent banking

I work with an agent at my place of work. But initially, I did not know he was an agent. When he revealed to me the company he is working for, I got very surprised. So I asked why he was always here and not working there. He smiled and replied, “If you are an agent, you get to work from anywhere you wish to work.”

a) The first benefit of agent banking is that as an agent, you get to work from wherever you choose to work.

b) As a customer of a bank, you do not have to travel to where the bank is actually located.

c) You also get to avoid the queues. No more standing in those long lines waiting to be worked on.

d) You get to also enjoy fast transaction processing.

Agent banking commission in Uganda

Bank agents are awarded commissions whenever they perform transactions on behalf of the bank.

These commissions are awarded whenever:

a) Someone deposits cash

b) Someone withdraws cash

c) Somebody submits documents to open a bank account through the agent

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Some roles the bank agents play include;

a) Cash deposits and withdrawals,

b) Fund transfers,

c) Bill payments,

d) Loan payments,

e) Payment of benefits etc.

Services offered by banking agents in Uganda

a) Managing funds in a deposit account.

b) Handling finances of businesses.

c) Depositing and withdrawing funds on behalf of customers.

Requirements for agent banking in Uganda

a). The agent should be a registered and licensed business;
– Registered Sole proprietor
– Registered Partnerships
– Limited liability companies
– Cooperative Societies
– Microfinance Institutions
– or any other entity which the Central Bank may deem fit for example payments companies.

b). The agent should have an account in a financial institution licensed by the Central Bank;
c) . Has a physical address;
d). Has adequate and secure premises;
e). Has been engaged in commercial activity for at least 12 months (Agent can not operate Agent Banking as their only business)
f). Has a good Credit reference Bureau report.

Is agent banking profitable in Uganda?

Yes, it is.

How is it profitable? We begin with how you become an agent. One of the requirements is that you should be having a registered business prior to becoming an agent. This means you already have an income-generating business already. In addition, you have a physical address and premise which you are operating from.

With all these already in place, what you are doing by becoming an agent is adding extra income to what you are already making. And there are enough people out there who are using agent banks rather than going to actual banks themselves since they are saving transport, and energy (by avoiding the long lines there), cutting down on the transaction costs, etc.