This paper investigates the role of agency banking in enhancing financial inclusion in South Africa. By applying three-stage least squares and logistic estimation techniques to samples from the 2015 and 2023 FinScope surveys, as well as the 2021 Global Findex, the study highlights a positive impact of agency banking on increasing the use of credit, savings, and bank transaction services.
The demand for agency banking is influenced by demographic, geographic, and behavioral factors. The research also identifies poverty, know-your-customer restrictions, and lack of trust in financial institutions as significant barriers affecting the demand for these services. Despite this, the overall effect of agency banking on financial inclusion appears to be diminishing.
The study emphasizes the need for strategic policy interventions tailored to address specific obstacles faced by various segments of South Africa's population in accessing financial services.