Uganda: Housing Finance Ready for Agency Banking

Housing Finance bank is ready for agency banking, Mathias Katamba, the managing director, has said.

Speaking at the rollout of the bank's mobile banking platform on Monday, Katamba said: "It is part of our grand plan to roll it [mobile banking] out and be able to get third parties to provide our services on behalf of the bank."

Last month, parliament amended the Financial Institutions Act 2004, paving the way for commercial banks to engage in agency banking. Islamic banking and bank assurance were also allowed. The new amendments await regulations and presidential assent.

Agency banking allows a financial institution to contract an agent, say a retail shop, supermarket chain, postal outlet or mobile network operator, to process transactions on behalf of the bank.

The agent can receive deposits, offer cash withdrawals and sell other bank products. This allows the bank to reach more places without having brick and mortar presence. This cuts on the costs of operation for the bank.

Katamba said HFB was looking forward to agency banking. In Kenya, banks are making more money through agents than in formal branches.

Last month, Standard Chartered bank boss Herman Kasekende told reporters that agency banking, together with Islamic and bank assurance, would change the face of the financial industry.

Meanwhile, Katamba said the new mobile banking platform would ease their engagement with the agents and customers. They will be able to check their balance, deposit and withdraw and pay bills for utilities. The customers who want to use the platform would dial *255#.

With more people preferring mobile money to banking halls, most banks are finding it safer to add the platform to their products basket.

SOURCE:THE OBSERVER