Page 171 - Special Topic Session (STS) - Volume 1

STS 422 Zarina A.R
The Growth of Agent Banking
Agent banking was introduced with the aim to provide financial access to
the population living in rural areas which have limited number of bank
branches. Agent banking enables consumers to obtain financial services by
licensed financial institutions through third-party agents such as retail outlets,
petrol stations and post offices.
The agent banking regulation allows agents to facilitate online-real-time
transactions with biometric identity verification. The agents can offer basic
financial services to consumers on behalf of the financial institution, such as
opening savings accounts, deposit or withdraw money, making bill and loan
payments, as well as making domestic fund transfers.

The 2018 survey findings shows that about 5 out 10 Malaysians are aware
of agent banking. The awareness is considerable high and more Malaysians
are using the services since 2015. For those that do use agent banking, it is
mainly for the purpose of bill payment, withdrawal and deposit. There is a
mark increased in the usage of these three main services, amounting to more
than 50 % of the total financial services provided by the agents.
It is envisaged that as people become more familiar with agent banking, it
has the potential to promote active use of accounts and to become the
distribution channel of a wider variety of financial services such as micro-
financing and micro-insurance among the population in rural areas.
1

1 World Bank 2017:The Malaysia Development Experience Series. Financial Inclusion in
Malaysia: Distilling Lessons for Other Countries.

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