Despite the efforts to advance retail and digital finance, financial inclusion indicators are deficient. While financial inclusion indicators are not impressive, outreach of the retail and digital financing services is still narrow. Experiences from Uganda for instance shows that agent banks in particular tended to be urban biased. This makes agent banking more of a banking hall decongesting tool than a financial inclusion tool.  

Incentive structures to agent banks can play a role in increasing breadth, however few of the incentives are deployed. In Uganda for instance, agent banks are not incentivized beyond commission on transactions. Small grants and/or marketing incentives specific to rural locations may for instance motivate bank agents to expand their outreach through a rural branch. Since household use of retail agents has been found to depend on the distance to the agent (Aggarwal et al., 2020), rural specific incentives may go a long way in advancing financial inclusion.

The purpose of this study is to study the impact of rural-specific grants and marketing incentives on agent bank performance and financial inclusion indicators. 

  • Aisha Nanyiti , Makerere University
  • John Sseruyange, Makerere University
  • Nicholas Kilimani, Makerere University
  • Monica Lambon-Quayifio, University of Ghana