Abstract:
The purpose of the study was to evaluate how agency banking affected Moshi
Municipality's commercial banks' financial performance. It looked at how the
performance of the banks was affected by low transaction costs, client accessibility to
financial services, and operational flexibility. Data were gathered via questionnaires,
interviews, and purposeful and accidental selection techniques as part of a cross sectional study design. For the study, a sample of 71 employees was selected. The
results offer insightful information on the Moshi Municipality's commercial banks'
financial standing. To analyse the data, the multinomial logistic regression model was
employed. The findings show that the performance of commercial banks is influenced
by the commission earned from agency banking operations. According to the report,
banks' financial performance is much improved when they use agency banking
services to cut transaction costs. The study suggests that banks should place a high
priority on developing a loyal customer base in order to broaden the institution's
flexibility. This will increase fair market competition and stop financial institutions
from mistreating their clients. The study's advice is that these financial institutions
should continue to offer low transaction rates within of their local agency locations.
The study goes on to say that in order to support their agencies and enhance bank
performance, commercial banks should continue to provide them a fair share of their
profits. The primary goal of this study is to determine how agent banking affects the
financial performance of commercial banks. The degree of diversity, market share,
and liquidity are just a few of the numerous variables that affect how financially
successful commercial banks are. The essential inquiry, aside from agent banking.
When analyzing with the remaining factors, it is necessary to look at each one to
ascertain its true impact
